The PATH to Savings
Energy efficiency isn’t simply a noble ambition. It can also help homeowners retain more of their paycheck come tax time. This is because an important income tax credit can offset some of the cost of eco-friendly home improvements and equipment purchases. But there’s one caveat. The extension of this tax credit ends December 31, 2016.
Thanks to the Federal PATH Act, signed into law last December and extending alternative energy tax credits, homeowners still have a few more months to make certain equipment and home improvement investments in their principal residence. These eligible improvements and purchases will reduce your year-end tax bill. For example, qualified central air conditioners could potentially reap a 100-percent credit (subject to a credit cap). The same holds true for qualified main air circulating fans used in furnaces along with qualified hot water boilers or furnaces.
Homeowners who install eligible Energy Star exterior windows or doors, energy-efficient insulation systems, or Energy Star roofing materials in asphalt or metal with heat-reduction components could gain a 10-percent tax credit.
Scorching summers may be here to stay, but green home improvement projects deliver ongoing financial savings in the form of lower heating and air conditioning bills. The addition of this timely tax credit is making 2016 a superb time to cross off those upgrades while you still qualify. A knowledgeable tax professional and contractor can work with you on these and other ways to prioritize home improvement projects around valuable federal and local green tax incentives.