Last Chance for Energy Friendly Tax Savings?
Tax credits for energy efficient products such as insulation are expiring.
Looking for that last-minute gift to keep someone warm this winter? You may want to make it insulation. Or maybe a nice tube of caulk and some weatherstripping. You have about another week to buy insulation and other energy-saving materials before tax credit for these items expire, according to the Alliance to Save Energy.
You can apply for a tax credit of up to $500 per household if you buy before Jan. 1, 2008. The tax credits expire on Dec. 31, and at the present time do not look like they will be renewed before the new year.
The tax credits were intended to be extended as part of the energy bill recently signed by President George W. Bush, but they were removed along with a tax portion of the bill to gain approval in the U.S. Senate.
There’s a good chance the tax credits will be back, as part of other legislation, but likely not until the new year. “If they do bring them back next year, they quite likely will be retroactive,” says Lowell Ungar, director of policy for the ASE. “We’re hoping that maybe it will part of something else, but I think there is going to end up being a gap [between the tax credits’ expiration and any new extensions].”
According to the ASE, the tax credits are available for:
Insulation and exterior doors, including storm doors—10 percent of the cost of the product (but not the installation), up to $500. Includes materials to seal air leaks such as caulk, weather stripping, and foam sealants.
Central air conditioner, heat pump, or water heater—Up to $300 towards the full purchase price, including installation costs.
Exterior windows, skylights, and storm windows—10 percent of the total cost, up to $200. All windows with the Energy Star label, the government’s symbol for energy efficiency, qualify.
Pigmented metal roofs—10 percent of the cost of the product (but not the installation), up to $500 for metal roofs with pigmented coatings that meet Energy Star requirements.
Furnace or boiler—Up to $150 towards the full purchase price, and/or $50 for an efficient air-circulating fan in a furnace, including installation cost.
All the details on the tax credits can be found at the ASE’s tax credit page.
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