Two Home Energy Tax Credits Expanded for 2010 Tax Year

Under the American Recovery and Reinvestment Act of 2009, two home energy tax credits available to homeowners were expanded for the 2010 tax year. Homeowners can use the "nonbusiness energy property credit" to offset up to 30% of what they spend on eligible energy-saving investments, such as high-efficiency heat or air conditioning systems, water heaters, energy-efficient doors, windows, and skylights, and certain roofs and insulation. There is a cap on the amount that can be claimed with this credit for the combined 2009 and 2010 tax years, and that is $1,500. 

The other credit, "the residential energy efficient property credit," can be used to offset up to 30% of what a homeowner spends on certain qualifying property such as solar electric systems, geothermal heat pumps, and wind turbines. There is no cap on this credit. For more information on both these tax credits, go to the IRS website at www.irs.gov and type the name of the credit into the search box.