Effective December 20, 2006, President Bush signed a bill that extends federal tax credits for certain renewable energy and energy efficiency projects. The consumer energy-efficiency credits for tax years 2006 and 2007, however, were not extended in the recent law. Therefore, you have only one year of eligibility left to get federal income tax credits for specific energy-efficiency upgrades to your home. There is up to $500 available per household for upgrading doors, windows, roofing, insulation, and heating/cooling equipment.
Ronnie Kweller, a spokeswoman for the Alliance to Save Energy, urges taking advantage of the credits while they are still available. When it comes to home improvements, it is wise to schedule your work as early as possible, to help avoid delays.
Electricity production
The 2006 legislation did extend the production tax credit through December 31, 2008, for electricity produced from wind power, geothermal power, biomass, landfill gas, small irrigation power, and incremental hydropower, trash combustion facilities. It also provides a similar one-year tax credit extension for new properties that produce geothermal power or make use of solar energy:
Homeowners that purchase solar water heating, solar photovoltaic, or fuel cell systems
Businesses that purchase fiber-optic lighting systems, solar energy systems, or fuel cell power plants for new energy efficient homes
Energy-efficiency improvements to commercial buildings
For electric cooperative and public power utilities, the act extends the Clean Renewable Energy Bonds program through the end of 2008, and it increases the total annual amount of tax-credit bonds to $1.2 billion, with a set-aside for electric cooperatives of at least $150 million.
It also extends special tax allowances for cellulosic ethanol facilities to include plants placed in service by 2012. The research and development tax credit, which encourages businesses to invest in new innovations, was extended as well.
For more information on energy tax credits, or to see if a recent home improvement or new construction is eligible, visit the following Web sites:
Effective December 20, 2006, President Bush signed a bill that extends federal tax credits for certain renewable energy and energy efficiency projects. The consumer energy-efficiency credits for tax years 2006 and 2007, however, were not extended in the recent law. Therefore, you have only one year of eligibility left to get federal income tax credits for specific energy-efficiency upgrades to your home. There is up to $500 available per household for upgrading doors, windows, roofing, insulation, and heating/cooling equipment. 