The $858 billion federal tax bill signed into law by President Obama on Dec. 17 had both good and bad things for American homeowners.
The legislation slashed the popular tax credits for energy-efficient remodeling from the current 30 percent of an improvement’s cost ($1,500 maximum per taxpayer) to just a 10 percent credit with a $500 maximum for expenditures on insulation materials, exterior windows and storm doors, skylights and metal and asphalt roofs that resist heat gain.
The bill also clamped new dollar-specific limits on key improvements that previously had been eligible for 30 percent credits. These include a $150 tax credit limit on the costs of energy-efficient natural gas, propane and oil furnaces, and hot water boilers), plus a $300 credit limit on the costs of central air conditioning systems, electric heat pump water heaters, biomass stoves for heating or water heating, electric heat pumps, and natural gas and propane water heaters.
The legislation also limits allowable tax credits available for energy-efficient windows installed during 2011 to a total of just $200 – down from the previous $1,500. On top of this, it prohibits taxpayers who have taken total tax credits in past years exceeding $500 from claiming any additional credits on energy-conservation projects they undertake in the coming year.
This legislation will no doubt diminish homeowners motivation to make energy-efficient home improvements such as insulation, insulated windows and HVAC upgrades.
Oh bummer ~ I guess time will tell!