Make Energy-Efficient Improvements, Earn Tax Credits

If you can come up with the cash —and Harvard University Credit Union can help you with that— make energy-efficient home improvements now to receive savings from tax credits and lower energy bills.

Thanks to economic stimulus provisions, you may be eligible for federal tax credits, which generally are more valuable than tax deductions. A deduction reduces taxable income based on your tax bracket, while a credit gives you 100% of the credit back and is not based on income.

Here's an example: If you're in the 35% tax bracket, a $1,000 deduction reduces your tax bill by $350, but a $1,000 tax credit reduces your tax bill by the full $1,000. You claim the credit when you file your federal income tax return.

Tax credits are available for 30% of the cost of these energy-efficient home improvements—up to $1,500, through 2010—for existing primary homes only:

  • Energy-efficient furnace, air conditioner, heat pump, or boiler
  • Insulation
  • Skylights, storm windows, and doors
  • Nonsolar water heater
  • Roofs (metal and asphalt)
  • Biomass stoves

Tax credits are available for up to 30% of the cost of these energy-efficient improvements —with no maximum dollar amount, through 2016— for existing primary homes, new home construction, rentals, and secondary homes:

  • Geothermal (ground-source) heat pump
  • Solar panels
  • Solar water heater
  • Small wind energy system

For more details about energy-efficient improvements, tax credits, and qualifications, visit Alliance to Save Energy, the Weatherization Source, and Energy Star.

Want more info? For starters, check out our Green Living Center or review the Home Equity programs offered by Harvard Credit Union. You can also stop by any of our branch locations, call us at (617) 495-4460 or email us for more information.

 

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