The 2005 Energy Policy Act Provides a Home Owner up to $500 in Tax Credits for Qualified Existing Home Improvements
2005 EPACT provides a maximum of $500 cumulative Tax Credit for a Home Owner for qualifying improvements to the Shell of the home and any other Heating Ventilation and Air Conditioning (HVAC) equipment. The Tax Credit is for the materials only and does not include the cost of preparation or labor. The $500 maximum is over the two years of 2006 and 2007. The Tax Credit is broken down to limits for different types of home energy improvements. Following is a listing of the tax credits available for each home improvement item. As with all tax credits, be sure to consult with your tax advisor. Before electing to replace any components to lower your utility bills, it is advisable to get an independent third party "Energy Audit" to determine what components will have the biggest impact on lowering your utility bills and what the items relative costs might be. How To Claim the Tax Credit The Tax Payer can rely on the manufacturers' certification specifications for meeting the equipment requirements. The Tax Payer must keep the specification documents and the receipts showing the cost of the equipment for his or her tax records. The Home Owner will file for the EPACT 2005 Tax Credit on their IRS 1040 form. No third party inspections of the equipment or installations is required. As always, consult your tax advisor. |
Qualified Components For Home Owner Tax Credits
Product Type | Minimum Specifications | Tax Credit | | Windows | Energy Star or meet the International Energy Conservation Code (IECC) version 2000 plus Amendments | 10% of material cost, max $200 | | Storm Windows & Skylights | Storm Window plus the existing window meet IECC 2000 plus Amendments code | 10% of material cost, max $200 | | Doors | Meets IECC 2000 plus Amendments code | 10% of material cost, max $500 | | Storm Doors | Storm Door plus a default Wood Door combined meet IECC 2000 plus Amendments code | 10% of material cost, max $500 | | Insulation | New Insulation R value plus old Insulation R value meets 2000 plus Amendments code | 10% of material cost, max $500 | | Metal Roofing | Energy Star low heat gain | 10% of material cost, max $500 | | Central Air Conditioning | 15 Seasonal Energy Efficiency Rating (SEER) | $300 | | Air Source Heat Pumps | 15 SEER with 9.0 Heating Season Performance Factor (HSPF) | $300 | | Ground Source Heat Pumps (Geothermal) | Energy Star Qualified and must provide water heating (desuperheater) | $300 | | Furnace / Boiler, Natural Gas or Propane | 95% Annual Fuel Utilization Efficiency (AFUE) | $150 | | Furnace Blower | ECM Motor (electricity use < 2% od total furnace site energy use) | $50 | | Electric Heat Pump Water Heater | 2.0 Energy Factor (EF) | $300 | | Water Heater, Propane, Nat. Gas, or Oil | 0.80 Energy Factor (EF) | $300 | | | Cumulative Total Tax Credit | $500 | |
Solar Water Heaters For Home Owner Tax Credits
EPACT 2005 provides a tax credit of 30% of the equipment and installation costs up to a maximum of $2,000 for Solar Hot Water Heating Systems. The system must supply 50% of the home's hot water demand and be Certified by the Solar Rating & Certification Corporation (SRCC). The system cannot be used to heat pools or hot tubs. Photovoltaic Systems For Home Owner Tax Credits EPACT 2005 provide a tax credit of 30% of the cost (including installation) of Photovoltaic (Solar Cells) up to a maximum of $2,000. |