Energy Efficient Tax Credits available for 2010
The Henssler Financial Group Position Paper

Taxpayers who took energy saving steps in 2009 or this year may be eligible for greater tax savings. The Nonbusiness Energy Property Credit, a tax credit for making energy efficient improvements to homes, has been increased as part of the American Recovery and Reinvestment Act of 2009.

Previously, these credits were subject to dollar limitations for certain expenditures and a $500 lifetime limitation. The new law triples the residential energy credit to 30% of qualified expenditures, up from 10%. Furthermore, the lifetime $500 dollar cap is eliminated and replaced by an overall limit of $1,500 for 2009 and 2010 combined.

Taxpayers who had exhausted their $500 lifetime limitation in 2006 and 2007 can now claim an additional $1,500 of aggregate credits for 2009 and 2010.

The enhanced residential energy credit covers a wide range of energy-efficient improvements, including roofs, insulation materials, exterior windows (including skylights), exterior doors, water heaters, central air conditioners and biomass fuel stoves.

The new law also removes the dollar caps for the separate 30% credit for expenditures on qualified solar hot water property, geothermal heat pumps and wind energy property.

Qualifying improvements must be placed into service after December 31, 2008, and before January 1, 2011. Manufacturers must certify that their products meet new standards, and they must provide a written statement to the taxpayer, such as, with the packaging of the product or in a printable format from the manufacturers' website. It is important for taxpayers to note that not all ENERGY STAR qualified products qualify for a tax credit. For detailed information about qualifying improvements, visit the U.S. Department of Energy’s EnergyStar website at www.energystar.gov.

For more information on the energy efficient provisions provided by the American Recovery and Reinvestment Act of 2009, visit http://www.irs.gov/newsroom/article/0,,id=206875,00.html or call one of our tax experts at The Henssler Financial Group Tax & Accounting Division at 770-428-4025.

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