How to Get a $500 Tax Credit for Energy Saving Home Renovations
Could You Get a Tax Credit For Improvements on Your DC Home?
Hi. My name is Michael Grove, but you can call me Max. I’m a lover of fitness, dogs, burgers, IPAs, and riding bikes and motorcycles.
As homeowners who spent a lot of time in 2014 doing renovations on our home, we were excited to hear that President Obama extended the Tax Increase Prevention Act for another year. That means we’ll likely qualify for a tax credit on some of our energy saving renovations. Since the credit can be up to $500, it’s worth looking into. Here’s what you need to know.
What’s a tax credit?
A tax credit is a dollar for dollar reduction in the amount of taxes you owe Uncle Sam. In other words, if you owe an additional $1,250 in income tax for 2014, a $500 tax credit would lower that amount to $750. In domestic engineering terms, it’s like having a coupon.
How do I know if I qualify for the tax credit?
If you made any energy-efficient home improvements during the course of 2014, you may qualify. The following improvements qualify if they meet the energy efficiency criteria and were put in use (not just purchased) at your primary residence before December 31, 2014:
- Exterior windows, including skylights
- Insulation (including attics, crawlspaces and pipes)
- Radiant foil
- Exterior doors
- Weather stripping
- Air conditioners
- Heat pumps
- Water heaters
- Main air circulating fans
- Hot water boilers
What else do I need to know?
You’ll need three things when you’re filing your taxes to get the tax credit. First, you’ll need the receipts for your purchases. Secondly, you need a copy of the manufacturer’s certification that the product meets federal energy efficiency standards. Finally, you have to submit an IRS Form 5695 with your taxes.
Also keep in mind that the maximum tax credit for these improvements is $500. Even if you spent more than that, the most you can receive is $500.
Is it too late to make the improvements?
Yes… and no. If you didn’t make any energy efficient improvements on your home in 2014, you will not be able to receive the $500 tax credit. However, there are still two good reasons to make the improvements in 2015.
Energy efficiency improvements on your home help to save money on the cost of energy throughout the year and make the climate of your home more comfortable
Secondly, up until December of 2014, it was assumed that the Tax Increase Prevention Act would expire in December of 2013, meaning none of the tax breaks in the act would apply to 2014 taxes. Homeowners who made the improvements anyway now have the opportunity to enjoy the tax credit they thought they’d missed. There is no indication the Act will be extended through 2015, but what if it was?
We can’t help you with your taxes, but Max Insulation has professionals who can help with your energy efficient home improvements should you decide to include those in your 2015.
Give us a call at (202) 341-6015 today, or email firstname.lastname@example.org.