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The new economic stimulus law (the American Recovery and Reinvestment Act of 2009) contains several tax incentives for energy savings. This new law triples the residential energy credit to 30% of qualified expenditures (up from 10%). Furthermore, the lifetime $500 cap is eliminated. It's been replaced by an overall limit of $1,500 for 2009 and 2010 combined. The changes are effective for energy-saving installations made after 2008 and before 2011.
The enhanced credit covers improvements in the home, including insulation materials, exterior windows (including skylights), exterior doors, central air conditioners, hot water boilers, electric heat pump water heaters, certain metal roofs and stoves, advanced main air circulating fans and natural gas, propane and oil water heaters or furnaces.
There are additional nuances to the incentives for energy savings. If you are considering making any energy improvements, please contact me or another tax professional to ensure you take advantage of any and all available incentives.
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