NAHB Reminds Consumers to Renovate Now Before Energy Tax Credits Expire

Home owners have two more months to take advantage of tax credits that can help them save energy and reduce their utility bills with more energy-efficient windows and doors, insulation, and heating and cooling equipment, according to the National Association of Home Builders (NAHB).

"Our members are ready to help consumers make the best choices for their homes, but home owners should act soon if they want to qualify for up to $1,500 in tax credits when they complete their 2010 income tax returns," said NAHB Remodelers Chair Donna Shirey, a remodeler and builder in Issaquah, Wash.

"We think it would be a great benefit to both the environment and to our economy to extend these tax benefits, but they are scheduled to expire at the end of the year," Shirey noted. "For that reason, NAHB suggests that home owners get the work done before Dec. 31, while the tax credits are still available."

The tax credit for efficiency upgrades in existing homes (Internal Revenue Code Section 25C) is available for 30 percent of the cost, up to a $1,500 limit for 2009 and 2010, for the installation of certain types of insulation, windows, roofs, water heaters, heat pumps, air conditioners and furnaces. Details on the kinds of products that qualify and instructions for obtaining the credit are available at www.nahb.org/efficiencytaxcredit.

Other Important Efficiency Incentives

In addition to supporting efficiency upgrades to existing housing, NAHB continues to push for the return of the section 45L tax credit for new, energy-efficient home construction, which expired at the end of last year. The section 45L tax credit was the only federal incentive available for efficiency in new home construction; about 10 percent of all new homes sold in 2009 qualified.

A tax credit available under tax code section 25D is also available for equipment that uses renewable energy, such as wind, solar, geothermal or fuel cells. Like the 25C credit, the 25D credit can be used for up to 30 percent of the cost of qualifying products, but there is no lifetime limit and the program does not expire until the end of 2016.

NAHB continues to push for extension and expansion of a variety of energy-efficiency incentives in both new and existing homes, but the current political climate is making such advocacy efforts challenging. For example, the national "Cash for Caulkers" or Home Star program, which sought to create a $5 billion national energy efficiency rebate system, did not get approved by Congress this year.

"We understand that there are trade-offs and budgetary considerations for all these programs," Shirey said. "Tax credits can take advantage of the existing administrative infrastructure – the Internal Revenue Service – to immediately get off the ground."

To find a remodeler or other contractor to help you with your weatherization or home renovation project, contact your local home builders association at www.nahb.org/findanHBA. To learn more about the tax credit program, go to www.nahb.org/efficiencytaxcredit.