Get Up to $1,500 in Tax Credit
If you’re like most homeowners, saving money on utility bills is a top priority for you. Bringing an environmentally friendly, high efficiency water heater into your home can be a great start. Recently, Congress increased residential tax credits for energy-efficient improvements. A number of appliances are now eligible for a tax credit of up to 30% (with a cap of $1,500) of the purchase and install price.
How is the credit calculated?
There are important limitations on this tax credit. First, this is a single tax credit that can be used on a variety of “qualifying energy improvements” and “property expenditures.” You may claim a maximum of 30% (with a cap of $1,500) of all of your “qualified energy improvements” or “property expenditures.” That means, if you purchase and install a qualifying furnace and claim $700 of the tax credit for the purchase and installation of your furnace, you have only $800 of the tax credit left to claim on your other qualifying expenditures. However, you can use the entire credit on a single product and installation. Second, the credit is limited to $1,500 for tax years 2009 and 2010 combined. If you claim all $1,500 on qualifying expenditures in 2009, you have used up the tax credit and cannot claim anything on your 2010 tax return; if you use only $900 in 2009, you may still claim the remaining $600 in 2010 for qualified products.
How do I get my tax credit?
To get your tax credit, you must purchase and put an eligible State water heater into service in your primary residence between January 1, 2009, and December 31, 2010. Save your receipt and use IRS 2009 Tax Form 5695 to claim your credit on your 2009 or 2010 tax return.