Energy Efficiency

Q: Can I get a federal tax credit to help buy an energy-efficient dishwasher?

A: Sorry, appliances don't qualify. But there are plenty of breaks if you invest in energy saving in your principal residence between January 1, 2009, and December 31, 2010. And you can use these breaks even if you benefited from similar ones in earlier years.

High-efficiency central heating and cooling systems, water heaters, biomass stoves, windows and doors, insulation, and heat-deflecting roofs are among the upgrades that qualify. For details, go to energystar.custhelp.com.

The credit represents 30 percent of the purchase price of one or more products, maxing out at a total of $1,500 combined for both years. In the case of central heating and cooling, you can apply the credit to labor costs, too. Keep in mind that products must have high Energy Star ratings and are expected to be in use longer than five years.

You'll need to keep a certification statement from the manufacturer or installer and fill out a Form 5695 (available at irs.gov). And if you're audited, you'll have to produce receipts and proof of installation; buying an energy-efficient water heater and storing it in the garage doesn't count.

Q: What about switching to alternative energy?

A: The tax credits here are even more generous: up to 30 percent of the cost, with no cap, for big-ticket items such as solar electric, solar hot water, wind power, and geothermal heating and cooling. If you can't take full advantage of the credit on your 2009 return, you can carry some of it over to your 2010 return.

Credits for alternative energy are authorized through 2016, so if you haven't made the switch yet, there's still time.

By the way, the solar hot-water subsidy applies to your daily hot-water needs, not your pool or hot tub.
Ask TOH users about Home & Real Estate

Contribute to This Story Below