Consumer Tax Incentives: Insulation, Windows, Sealing
What is the tax credit for existing homes?
Existing homes are eligible for a series of efficiency measures. For some measures, such as insulation, a taxpayer can take a credit of up to 10% of the cost. There is a $500 cap on the credit per home, including the amount received for heating and cooling equipment, as described in the next section. Lower caps are set on credits for some individual measures.
These credits are available for buildings or systems placed in service from January 1, 2009, through December 31, 2009.
Read an IRS summary of the credit: Click here
What is eligible for the federal tax credits?
Eligible measures are:
- Added insulation to walls, ceilings, or other part of the building envelope.
- Replacement windows and skylights: credit capped at $200.
- Window Films
- External doors
- Sealing cracks in the building shell and ducts to reduce infiltration and heat loss.
- Pigmented metal roofs, or an asphalt roof with appropriate cooling granules.
Only materials (insulation, windows, sealants, etc.) are eligible and not the labor to install these materials.
Efficiency levels that qualify for the incentive are:
- Added insulation and replacement doors to bring insulation and doors up to levels specified in the 2001 IECC model energy code.
- Replacement windows meeting the requirements in the 2000 IECC model energy code. Energy Star windows will always qualify. In addition, storm windows are eligible if the existing window plus the new storm window meet the window requirements in the 2001 IECC.
- Certain window films are eligible for the tax credit if the manufacturer certifies that the specific window film satisfies the requirements of a “qualifying insulation system,” and the manufacturer certifies the product as meeting those requirements, the product is eligible for the tax credit of 10% of the cost of the materials (not installation labor), up to the $500 cap.
- Sealing cracks and holes in the building shell and ducts – under the IECC these should be sealed so sealing remaining leaks is consistent with the IECC.
- Roofs: metal roofs with pigmented coatings or asphalt roofs with cooling granules must meet Energy Star requirements.
New- View IECC Climate Zones by state and county, and IECC 2004 Supplement Edition R-values and U-factors for insulation, windows, and doors (8MB PDF).
Manufacturers and retailers should be able to help you tell whether a specific product qualifies.
What do I need to do to qualify for the incentives?
Under the IRS rules, manufacturers need to certify that specific measures are eligible. Homeowners should obtain a copy of this certification from the manufacturer, installer or retailer when buying these products. Certifications need not be submitted to the IRS, but should be kept on file in case the IRS has questions. Homeowners should also make notes on when each eligible measure is installed- only measures “placed in service” in 2009 are eligible.
So what else do I need to know?
Before you invest in any of these projects, be sure to read all the fine print. Some of these tax credits have restrictions. For example, eligible replacement windows have the Energy Star designation.
And don’t forget that you may be eligible for additional state or local incentives. You can find out more about what’s available by visiting the Database of State Incentives for Renewable and Efficiency.