Life Inc.: Heating tax credit is burning out

Workers install solar panels on a houseMsnbc.com’s Bill Dedman writes:

Taxpayers have only until the end of the year to qualify for a $1,500 federal tax credit for new windows, insulation and other home energy improvements. The credit can reduce a tax bill by 30 percent of buys up to $5,000, for a maximum saving of $1,500 per home.

Eligible products for 2010 include certain exterior doors and windows, skylights, water heaters, central air conditioners, electric heat pumps, furnaces, boilers, air circulating fans, insulation, roofing materials.

A separate list of products can be bought through 2016: geothermal heat pumps, solar electric and solar water heating units, wind energy systems, residential fuel cell systems.

The deadline: The products need to be placed in service by Dec. 31, meaning they have to be installed before the New Year begins, not just bought by then.

Other limitations: The products have to be used in a primary residence, which can be a new or existing home. If you used the full $1,500 tax credit in 2009, you cannot use it again in 2010. And there is only one $1,500 credit, not a separate credit for each item: If you use it for windows, you cannot use it again for insulation.

Although Congress, in its recent extension of the Bush-era tax cuts, extended this program until 2011, it also capped the program for 2011 at $500. And only 10 percent of the cost of improvements is covered, so this next week remains the last chance to qualify for the $1,500. The new $500 limit is also a “lifetime” limit, meaning anyone who took advantage of $500 of more since the beginning of 2006 cannot use any of the $500 next year. There are other restrictions as well, such as a $200 limit for windows.

Details on the current program are here.

More source:

Life Inc. - Heating tax credit burning out
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Submited at Monday, December 27th, 2010 at 8:00 pm on Finance by arrisa
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