Look up in the attic for next year's tax deduction

> Associated Press) - Apr 10 - By J.W. ELPHINSTONE AP Real Estate Writer
> Before you put your 2008 tax documents up in the attic, think
> about the $1,500 you could save on next year's returns if you added
> extra insulation or a skylight.
> Congress tripled the tax credit for energy-efficiency home
> improvements when it passed the latest stimulus plan. The tax credit
> now covers up to 30 percent of the cost of products installed this
> year and next.
> The list of big-ticket items it covers is long: windows, outside
> doors, metal or asphalt roofs, heating and cooling equipment and fuel
> cell batteries, among others.
> But if you were hoping it included the new Energy Star-rated
> refrigerator or washing machine you're eyeing, no luck. Though some
> state and local programs might.
> Check Energy Star's web site,, to find
> out which products qualify. The credit doesn't cover installation
> costs for most items.
> "This gets at the low-hanging energy efficiency measures that can
> be done for existing homes," said Jason Hartke, the director of public
> policy at the U.S. Green Building Council.
> He suggests improving your home's insulation first before
> tackling your heating and cooling systems. Otherwise, air will just
> leak out of the house.
> Kevin Enyeart, vice president and general manager of Gale Home
> Builders in Kansas City, Mo., recommends spray foam insulation that
> can be easily applied to the underside of an attic roof. A judge in
> last year's National Association of Home Builder's green building
> awards, Enyeart says this product is both an insulator and a vapor
> barrier.
> The tax credit also includes updating your existing heating and
> cooling equipment, including furnaces, boilers and air conditioners.
> Fuel cell batteries with a half-kilowatt of power capacity are
> also covered and can be installed through 2016.
> Make sure your contractor breaks down their bills, showing both
> labor costs and materials costs separately. Keep a copy of the receipt
> and the Manufacturer Certification Statement for your records.
> The federal tax credit isn't the only game in town, however. Many
> states, cities and utilities have their own rebate and loan programs.
> And some cover smaller improvements like new energy-efficient
> household appliances and electronics.
> Michigan residents can receive 10 percent of the cost, up to $75,
> for washers and dryers, dishwashers and refrigerators through 2011.
> Georgia
> traditionally grants a four-day tax exemption each year for energy-
> efficient appliances, lighting, doors and windows.
> Those living in Aspen, Colo., are eligible to get a rebate worth
> up to $150 for buying energy-efficient programmable thermostats and
> major household appliances. And, through this year, the Plumas-Sierra
> REC utility in California offers rebates for major household
> appliances as well as one for televisions ($20) and compact
> fluorescent lightbulbs ($2).
> Check the web site for the Database of State Incentives for
> Renewables & Efficiency,, to find out what
> rebate programs states, cities and utilities offer.
> The green tax credit lowers the amount of money dollar-for-
> dollar that you owe the federal government. It's also nonrefundable,
> which means it can reduce your tax liability to zero but not below.
> You can't receive the credit if you don't owe the government a penny.
> Improvements made this year must be claimed on 2009 taxes and
> those made next year must be filed with 2010 taxes. If a taxpayer
> doesn't use the entire $1,500 tax credit this year, the remaining can
> be applied to 2010 for a new improvement made that year.
> The government expects a huge response from American homeowners,
> according to budget estimates. The government is expected to spend
> $1.84
> billion to cover the credits for 2009 and 2010, according to the Joint
> Committee on Taxation. That compares to $186 million it expects to
> spend on the older tax credit this year.
> Besides a lower tax bill, you will have lower energy bills. The
> average home's energy bill totals $1,900 a year and heating and
> cooling costs account for half of that, according to the U.S.
> Environmental Protection Agency. By plugging leaks and adding
> insulation in attics, crawl spaces and basements, a homeowner can save
> 20 percent - $380 a year on average - on energy costs.
> Updating heating and cooling equipment can cut a home's energy
> bill by up to $200 a year and switching energy-efficient appliances
> certified by Energy Star can save $75 annually in energy costs.
> The other benefit of a green home is better air quality and, by
> extension, your overall health.
> "Your performance goes up when you live in a green home," Enyeart
> said. "How do you put a dollar amount on that?"