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Earn an energy tax credit

July 03, 2009

We usually don't think about high utility bills and taxes while the weather is comfortable and cool. But summer is exactly the time to think about energy efficiency, and now's the time to act.

Replacing inefficient windows and doors, heating and cooling equipment and insulation can decrease energy bills and make a home more comfortable. With the federal tax credits and utility company energy rebates, the benefits go beyond lower utility bills. A tax credit is a dollar-for-dollar reduction in what you owe in federal taxes.

In our area, Allegheny Power has the Watt Watchers program available to help customers learn more about saving energy and money. Go to www.alleghenypower.com/EngCon serv/EngConservHome.asp .

The recent federal stimulus bill (formally called the American Recovery and Reinvestment Act of 2009) made significant changes to energy efficiency tax credits. Visit www.energystar.gov/taxcredits for a list of improvements and specific products that qualify.

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Some general information about the tax credits include:

Credits are available at 30 percent of the cost of windows and doors, insulation, roofs, HVAC, water heaters and biomass stoves. The credit is available for up to $1,500 for property placed in service in 2009 and 2010 for existing homes.

Credits are available for 30 percent of the cost of geothermal heat pumps, solar panels, solar water heaters, small wind energy systems and fuel cells. The credit has no upper limit and is for units installed through 2016 in existing and new construction.

To receive the credit, taxpayers must complete a 2009 IRS Form 5695 (which will be available late in 2009). Be sure you keep the product receipt and the manufacturer's certification statement, a signed statement from the manufacturer certifying that the product or component qualifies for the tax credit, with other tax records.

The value of the tax credit make it worth the time spent researching the specifics and completing the paperwork.

Lynn Little is a family and consumer sciences educator with University of Maryland Cooperative Extension in Washington County.

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