Economic Stimulus Legislation Means Benefits for Homeowners

 

A tripling of the tax credits for homeowners purchasing new, highly efficient air conditioners, heat pumps and furnaces is among the benefits for “Main Street” citizens included in the multi-billion dollar economic stimulus package signed into law in February.  

The new 30% tax credit of up to $1,500 is three times the 10% credit, which capped at $500, that was available for these purchases in previous legislation.  The $1,500 tax credit is good for qualifying equipment for existing homes from now through 2010 and can also be applied to energy-efficient upgrades of residential windows, doors and insulation. 

“As a tax credit, this reduces the amount you will pay in taxes, but that’s just one part of the savings,” said Tommy Feehan of Feehan Plumbing & Heating.  “When you purchase an energy-efficient home comfort system, or make one of the other upgrades, you’ll also reduce what you’re paying in utility bills.  In other words, the tax credit helps you with the cost of the system; the energy efficiency of the system helps with the cost of your utility bills.” 

Among the other “Main Street” provisions, new car buyers will be allowed to deduct the purchase’s sales tax from taxable income.  A tax credit of up to $7,500 is available for families buying plug-in hybrids.  The legislation also contains funds to weatherize a million low-to-modest income homes a year.

“I would caution homeowners to be careful about how they proceed,” Feehan said. 
“To qualify for the tax credits, the equipment and improvements have to meet minimum efficiency standards.  So make sure you check with an energy-efficiency professional before you commit to your improvement.”

On the horizon long-term will be efforts to modern the nation’s electrical grid and develop  “smart grids.”  Smart grids are more efficient and less costly methods of transmitting electricity to homes and businesses, so that could eventually mean less money leaving consumer pockets to pay utility bills.  Making federal buildings more energy efficient – which taxpayers pay to heat and cool – is also in the works.

“This is very complicated legislation,” said Feehan.  “But you don’t have to read all 1,100 pages to know that there’s something in here for you, which can help you purchase energy-efficient heating and cooling systems that will lead to more energy savings in your own home.  We aren’t likely to see offers like this again, so I encourage homeowners to take advantage now.  They’ll enjoy many years of comfort as well as many years of savings on their utilities.”