Get Energy Tax Credits Before Filing Tax Returns

Radiant Barrier Foil, Wind Turbines, and Solar Panels Saves Money

Nov 5, 2009

US income tax filing is coming. To maximize tax returns, claim energy tax credits by reducing residential energy consumption. Solar panels, insulation, and wind energy.

In February, 2009, the Obama administration instructed the IRS to lower federal withholding tax on company payrolls. Although hailed as a tax cut, it's effectively a withholding cut. Whether it makes any difference at income tax filing time, depends on the individual situation.

The percentage of earnings that a wage-earner gets to keep depends on many factors. Some of these are tax bracket, filing status, exemptions, deductions, and tax credits; especially energy tax credits for the purpose of this article. This is a way to get a bigger income tax return while saving money on utility bills for years to come.

The Federal Government Encourages Greening the Home

This is the reason for the energy tax credits. The bottom line is to conserve resources and to reduce the national carbon footprint. Installing the applicable green building materials and alternative energy producing technology will do that. But it's critical to know what qualifies and what doesn't.

As with most things involving the government, common sense isn't that common. Following are some of the most popular categories that homeowners look at. Before investment, it's important to look at the ROI (Return on Investment).

Installing Solar Panels to Harness the Sun

Solar panels and wind turbine systems are always popular items. Part of the interest is no doubt the product of homeowners tiring of high energy bills and wanting to get off the power grid as much as possible. It is important to be well informed before investing in either of these technologies.

Solar panels (photovoltaic systems) are great in theory but hey are expensive, so getting a proper ROI is only possible if the owners will remain in the home for some time, although it does add to home equity. That time depends on many factors.

But as it stands now, the energy tax credit is 30% of cost. Keep in mind that the much more affordable, configurable, and energy efficient thin film solar panels are just starting to become available to the public.

Wind Energy Turbine Systems

Using energy from the wind is nothing new. In a sense, mankind has been tilting at windmills for centuries. This technology was used to grind grain long before electricity production was even imagined.

The modern residential wind turbine can supply electricity in rural areas, but they are not practical, or in many cases, even allowed in urban areas. They must be mounted high enough to catch the unobstructed breeze. If the home is going through a still period, it's back to the electrical grid and the utility company. To qualify for the 30% tax credit, it must have a capacity of not more than 100 kilowatts.

Installing Insulation for Improved Thermal Performance

Insulation has a tremendous ROI. It's inexpensive and in most cases, easy for the homeowner to install. In order to qualify, it must meet the 2009 IECC & Amendments. Some brands of radiant barrier foil, such as Energy Q, are considered an insulating material and so qualify for the 30% of cost tax credit.

Note that the 30% tax credit applies to the cost of materials, not installation labor costs.

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