Yes, its that time of year again! But with this year’s increased benefits for energy saving improvements you won’t want to forget them when it comes time to file your 2009 tax returns.
Here are some basic points on federal energy tax credits for 2009. Make sure you have documentation for the actual installation of your energy saving improvement. Items “placed in service” —installed not just purchased—in 2009 will qualify. To file for a Residential Energy Credit, the IRS provides a Form 5695, which details the items and allowances to qualify for the credits. To download this form, click here.
Items that may qualify for 2009 energy tax credits include electric heat pump water heaters, electric heat pumps, high-efficiency central air conditioning units, high-efficiency natural gas, propane or oil water heater, or a biomass fuel stove that uses a plant-based fuel, such as wood or wood pellets. Solar hot water and electric units, small wind energy units and geothermal systems also can qualify for tax credits.
States also have rebates and other tax credit opportunities that can affect your final tax bill. To learn the potential deductions and rebates in your state, visit the Database of State Incentives for Renewables and Efficiency (DSIRE) and click on your state. Rebates and incentives range from replacing incandescent light bulbs with compact florescent lighting (CFLs) to washing machines, dryers and refrigerators. The notices are updated frequently so it’s a good idea to check your state’s options often.