Federal Tax Credits for Energy Efficiency

Federal Tax Credits for Energy Efficiency
As of February 17th, 2009, customers buying new insulation may be eligible for a federal tax credit of 30 percent of home insulation costs, up to $1,500.

The economic stimulus bill, known as The American Recovery and Reinvestment Act (H.R. 1), was signed into law by President Obama on February 17th of 2009. The economic stimulus bill will provide significant energy tax credits for energy efficient home improvements made during 2009 and 2010. Eligible home improvements include those made to roofs, windows, doors, insulation, HVAC and non-solar water heaters.
Section 1121 of the Bill states that consumers who choose to make these improvements in the coming year can receive an energy tax credit for 30 percent of the cost, up to $1,500. Eligible building envelope component tax credits for home improvements, including insulation, do not apply to consumers who are building new homes.
For insulation to qualify, the primary purpose must be to insulate. For example, aluminum siding does not qualify as insulation. A manufacturer's certification is required and the insulation must be expected to last for at least 5 years, or carry a 2 year warranty.
Consumers should keep any receipts and Manufacturer's Certification Statements for tax purposes (IRS Form 5695). The insulation must be 'placed into service' during the taxable years of 2009 and 2010. Home improvements made during 2008 are not eligible for this tax credit.