Renovation Package
Home Renovation Tax Credit Guide by Ted and Deb Wilson
Home renovation tax credit is provided by the government to make energy saving improvements around the home popular. Many households have already used the program’s benefit within the last 2 years. The government has considered extending the program considering the success it had which was then part of 2009′s Recovery and Reinvestment Act in the U.S. Here, you will learn important points about this tax credit.
Requirements. To be able to qualify for the benefit, an individual who is interested must be paying taxes regularly. The claimants must be residents of the home on which the tax credit is being secured. The house must be the primary residence of the applicant. Expiry of this program is on Dec. 31, 2011. Those who have already claimed their benefits need not apply anymore as this 2011 program is only for those who have not made any claims.
Allowable Tax Credit. In the years 2009-2010, the amount allowed for home renovation tax credit was 30% of the total cost of renovation. It had a highest limit of $1500 for every taxpayer. This year, this amount was reduced to only 10% of the improvement cost with the limit decreased to $500/taxpayer.
Energy-Efficient Home Improvement. The home renovation tax credit program covers the installation of energy efficient windows and doors. Installation costs are excluded. Only the cost per item is included. All costs except those on installation spent on fiber glass, spray foam and blow-in cellulose can be considered for credits. You just need to make sure that all the insulating materials used follow the guidelines set by the IECC.
Costs of energy saving water heaters plus installation have a maximum benefit of $300. Air handlers, heat pumps, furnaces, boiler systems, propane systems and central units are qualified for a credit. The furnace though, needs to have an efficiency of at least 95%. Biomass stoves have $300 maximum credit and lastly, asphalt and metal roofing are qualified for a credit but does not include costs of installation.
Procedure for Application. Those who wish to get the benefits of a home renovation tax credit can claim it when filing for the 2012 income tax returns. The IRS will issue an additional application form that will be attached to the income tax form.
There has been a substantial decrease in the home renovation tax credit package of 2011 in terms of benefits. This happens while homeowners strive to apply energy saving provisions in their homes. It has then been perceived that many people might not be too keen on applying for the credit this time due to the few stimulants offered. Study more about the home renovation tax credit package and see how it can be beneficial to your own situation.
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