I’ve been reading and hearing a lot about the end of tax credits for furnaces and insulation. What can you tell me about these?
There are a number of federal tax credits available for making energy-saving investments in your home, but many of them expire at the end of this year.
If you’ve been considering some energy-efficiency improvements for your home, the federal tax credit might just be the thing to nudge you into action.
What’s included?
The tax credit is available when you purchase a variety of energy-efficient products. Among them are heat pumps, air conditioners and furnaces. These are limited to units with certain efficiency levels, but there are a number of options for each appliance.
Water heating, which is typically the second largest energy user in a home, offers a great opportunity to save. And the credit applies to gas, propane or oil water heaters, and to electric heat pump water heaters.
The tax credit is also available for people who make weatherization improvements, such as adding insulation or upgrading windows, doors and skylights to their homes. In most cases the credit is applied to the cost of the materials, but not the installation. The credit also applies to a number of air sealing products, including weather stripping, spray foam in a can, caulk designed for air sealing and house wrap materials.
A few of the details
The credit is 30 percent of the qualified cost up to $1,500.
You’ll want to carefully select the improvements you make, because only certain items qualify. In some cases the credit applies only to a current residence, while other times it can be used for a second home as well.
You’re only entitled to one $1,500 tax credit for energy efficiency. For more information on the credits, and the specific limitations, we suggest you visit the Energy Star website, http://www.energystar.gov.
Shopping suggestions
Folks who sell these products likely know which models qualify for the tax credit. We suggest you get three proposals before you make a purchase.
Clark Public Utilities also offers homeowners with electrically heated homes incentives and financing for heat pumps, insulation and windows when they work with someone from our list of participating contractors. For more information, visit http://clarkpublicutilites.com, or give us a call at 360-992-3355.
Additional options
There are other credits available that don’t expire this year. Tax credits for installation of solar water heating, solar electric and wind energy systems expire in 2016. Credits also are available for geothermal heat pumps.
You might also want to check out Washington’s state rebates on ductless heat pumps and water heaters at http://www.cashforapplianceswa.com.
We’re not tax experts at the Energy Adviser, although we do file our 1040 forms each April 15. So our first suggestion would be to see a tax professional for full details on how these credits could affect your individual situation.
The Energy Adviser is written by Clark Public Utilities energy counselors, who provide conservation and energy use information to utility customers. Send questions to energyadviser@clarkpud.com or to Energy Adviser, in care of Clark Public Utilities, P.O. Box 8900, Vancouver, WA. 98668. Past topics are available at www.clarkpublicutilities.com.
