Homeowners looking to remodel can take advantage of valuable energy tax credits
Thinking about pulling the trigger on a home improvement project but concerned about how far your remodeling dollar can stretch in a tight economy? Take advantage of valuable energy efficiency tax credits on eligible products implemented in 2011.
Homeowners can receive a cumulative credit of up to $500 for any combination of the following items (not including installation costs), provided they’re installed by December 31:
• Insulation—offering a maximum credit of 10 percent of the cost
• Roofing—max credit of 10 percent of the cost
• Windows, doors and skylights—max credit of 10 percent of the cost (windows are capped at $200)
• Water heaters—$300 credit
• HVAC systems—$300 credit on central air conditioners;
Additionally, tax credits are available through 2016 at 30 percent of the cost, with no upper limit, on geothermal heat pumps, solar energy systems and wind turbines.
“If you’ve been putting off that door or window replacement, new roof, HVAC upgrade or other remodeling project, now is the best time to begin—especially when you consider that the government is essentially giving you free money to act now,” said Mimi Altman, executive director of the Des Plaines-based Greater Chicagoland Chapter of the National Association of the Remodeling Industry (NARI). “What’s also advantageous is that these are tax credits, not deductions. That means you get a dollar for dollar reduction in the amount of tax you owe, instead of a deduction that reduces the amount of your income that is considered taxable.”
The tax credits provide an added incentive to initiate what experts recommend is a smart strategy: replacing outdated components and improving your home’s overall energy efficiency.
Eventually, said Mike Pudlik, master certified remodeler (MCR), green certified professional (GCP), and president of St. Charles-based Legacy Design and Construction, Inc. (www.remodelwithlegacy.com)
“When you consider that prices for electricity and natural gas will continue to increase, it pays to install new products in your home that are more energy efficient,” Pudlik said. “If you’re planning to sell soon, it’s a great way to boost your home’s resale value, but even if you plan to stay put, you can enjoy the advantages now and start recouping the costs quicker in the form of decreased utility charges.”
What’s more, implementing a remodel involving products eligible for the tax credits—such as Energy Star-labeled doors and windows—is likely to create better indoor air quality in your home, which can improve the quality of life for allergy and asthma sufferers and reduce the amount of toxins you breathe in, said Pudlik.
While the tax credit deadline is still months away, it’s not a good idea to procrastinate your home upgrade plans too long, said Jack Philbin, certified remodeler (CR), certified kitchen and bath remodeler (CKBR) and owner, Philbin Construction and Remodeling Co. in Mokena (www.remodelwithus.net)
“Keep in mind that, from the date you order them, it can often take several weeks to receive new products like windows, doors or HVAC equipment, and you also have to schedule a time that works for your calendar and that of the remodeling contractor,”
Plus, the longer you wait, the greater the risk that the costs will rise on petroleum-derived products such as roofing shingles and vinyl windows.
Philbin noted that, while replacing old doors and windows with energy efficient substitutes is a popular choice that can instantly increase your home’s green quotient and esthetic appeal, two less sexy projects can be at least as beneficial.
“Installing a tankless water heater can save big money on your natural gas bill and provide you with greater water comfort and convenience—
For more details on eligible products, applicable restrictions and how to claim your tax credits, visit www.energysavers.gov/
Based in Des Plaines, The Greater Chicagoland Chapter of the National Association of the Remodeling Industry (NARI) is a not-for-profit trade association founded in 1987 and currently consisting of approximately 280 member companies. NARI Chicago is committed exclusively to the service of the local professional remodeling industry, representing professional remodeling contractors, product manufacturers, distributors, wholesalers, trade and consumer publications, utilities and lending institutions.