What the expanded remodeling (weatherization/insulation) tax credit means for consumers.

[jpak]

http://www.latimes.com/business/la-fi-lew30-2009mar30,0,7783598.story

Reporting from Washington -- Lost in the news of an expanded tax credit for home buyers is perhaps an even better deal for people who already own homes and want to make them more energy-efficient.

Both are part of the latest economic stimulus package signed by President Obama on Feb. 17. But while lawmakers saw fit to boost the buyer tax credit by a mere $500 to $8,000, they tripled the benefit available for the remodeling tax credit.

Under the old remodeling credit, which was part of the economic rescue package enacted last fall, homeowners could claim a credit equal to 10% of the cost of energy-efficient windows, doors, roofing, insulation, furnaces, air-conditioning systems and heat pumps. They could claim 10% of the cost of each product, up to a lifetime cap of $500.

But like builders, who contended that the original $7,500 tax credit for first-time buyers wasn't enough to bring people back into the housing market, especially since it had to be paid back, remodelers maintained that the energy credit wasn't sufficient to persuade owners to make upgrades.

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[sinkingfeeling]

1. Yeah, I put in $16,000 in energy efficient windows and got a $500 tax credit.

[Frustratedlady]

2. My daughter and sil built a new house and did everything as instructed,

but just one or two items (which they were told qualified) knocked them out. I'm talking about windows, doors, insulation, heating/air, all appliances, etc.

They were sick, except that those items will pay for themselves eventually.

Unless they've changed it, be very careful about the rules.

[pinto]

6. New credit is 30%, up to $1,500. Credit comes directly off tax bill.

"So Congress upped the ante, raising the per-item credit to 30% of the cost and boosting the lifetime ceiling to $1,500. It also extended the deadline for making the improvements through the end of 2010.

What's more, the act is retroactive to Jan. 1, so if a product that met the previous criteria -- under the rule in effect between Jan. 1 and Feb. 17 -- was purchased and installed during that period, it still qualifies for the larger bonus.

Note that a tax credit differs from a tax deduction in that it reduces the amount of tax you have to pay. For example, if you owe $800 in taxes and earn a $300 credit, you will owe only $500. Or if you owe nothing, you will get a $300 refund. A deduction, on the other hand, reduces the amount of income subject to tax. So if your taxable income is $35,000 and you have a $500 deduction, your taxable income is reduced to $34,500."

[phantom power]

7. would that include A/C?

[pinto]

8. Not sure. (sorry for the delay in responding - stepped out)

[msongs]

3. too bad we put in all new windows....last year. nice n quieter in the house now tho nt

[phantom power]

4. Same here.

Apparently, we managed to find the one 6-month window where there was exactly zero tax benefit in effect.

That's my superpower.

[Extend a Hand]

5. I'm thrilled

I bought a 1910 Queen Anne Victorian and am in the process of selecting a geothermal system thanks to that credit.