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New information from the U.S. Census Bureau on residential energy efficiency tax credits shows that replacement windows and skylights accounted for 34% of the 25C tax credit claims made by existing home owners, followed by insulation upgrades, 13%; doors, 9%; and qualified roofing materials, another 9%.
Section 25C provides a credit of 10% for the purchase of qualified energy efficiency improvements to existing homes — such as the installation of energy-efficient windows, doors, roofing and some home appliances like water heaters.
The maximum 25C credit for a taxpayer is $500, and no more than $200 of that amount can be used for windows.
The energy-efficient home products must be “placed in service” during 2011.
Energy-saving appliances accounted for the remaining 25C claims — 17% for hot water boilers; 16% for heat pumps, air conditioners, water heaters and stoves; and 3% for air circulating fans used with a natural gas, propane or oil furnace.
A total of $25.1 billion of qualified expenditures were claimed under the credit in 2009, which generated a significant amount of economic activity.
NAHB estimates that every $100,000 in remodeling expenditures generates 1.11 full-time jobs.
Under Section 25D, a total of $738 million in tax credits were claimed for 2009, with an additional $69 million of these credits carried forward from prior years.
Section 25D provides a tax credit for the installation of certain power generators in new and existing homes — including solar panels, geothermal heat pumps, small wind turbines and fuel cells.
These credits are uncapped and available for 30% of the cost, through 2016.
They are only valid for improvements to the taxpayer's principal residence — with the exception of qualified geothermal, solar and wind systems that can be installed on any residence.
Solar panels and geothermal heat pumps each accounted for about 45% of the credits claimed — followed by solar water heaters, 9%; wind turbines, less than 2%; and fuel cells, 1%.
A fact sheet published by NAHB provides information on the tax credit programs.
More economic news can be found on NAHB’s Eye on Housing blog.
For more information, email Rob Dietz, or call him at 800-368-5242 x8285.