A 30% Energy Tax Credit for consumer energy efficiency is currently in effect in the US. If you purchase an energy-efficient product or renewable energy system for your home, before Dec, 31, 2010, you may be eligible for a federal tax credit. Products qualified for the credit include bio ethanol fireplaces, and other energy saving devices, such as more efficient windows and doors, as well as insulation. It should be noted that only homeowners qualify for the credit. Renters who decide to buy an ethanol fireplace unfortunately do not qualify, nor can you claim the credit for vacation homes.
Some energy efficient products like refrigerators or ceiling fans do not qualify for the federal tax credit, but could be eligible for a rebate from your state. All 50 states have or had such programs. Some programs have been rescinded. My advice is for you to check with your state agency as conditions vary from state to state.
Tax credit FAQs
What is a federal consumer tax credit?
Any tax credit is an amount that consumers can deduct from their income tax, at the time of filing. A tax credit is more valuable than a deduction because the full amount is subtracted (dollar for dollar) from the amount of taxes owed, as opposed to a deduction that reduces the amount on which your taxes are calculated.
Are there limits on the energy tax credit?
The provision is for a 30% tax credit of up to $1500 total over a two year period (2009-2010) for the purchase of a 75% efficient biomass-burning appliance, or other energy saving devices.
Are prior purchases covered?
As long as your purchase was made between January 1, 2009, and December, 31, 2010, it is covered.
Are installation costs covered?
The quick answer would have to be yes, however the long answer is not that simple since we are dealing with the government. I therefore refer you to the EPA site where you might get a not so straight answer. Regardless what energy conservation improvement you made to your home, or if you are planning to add energy efficient windows, an ethanol burning fireplace to replace your old wood one, or adding insulation, do not miss out on this opportunity for some assistance in the form of a tax credit.
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