In the market for new appliances for your Maryland (MD) or Washington, DC home? There is still time to cash in on the federal government’s $1,500 tax credit for energy efficient appliances. The following is a list of things you should consider before making your new investment.
Q: If both my spouse and I buy $5,,000 each in new appliances, can we both receive a $1,500 credit?
A: No. The $1,500 tax credit goes to households, not individuals, so the two of you combined can make a maximum of $1,500. You can break it up, however. If you buy $3,000 in appliances and your spouse buys $2,000, you will receive $900 and $600, respectively.
Q: Do all energy efficient appliances qualify for the $1,500 tax credit?
A: Unfortunately, no. Not even all Energy Star appliances qualify. In order to find out if your new appliances qualify for the $1,500 tax credit, look for the Manufacturer’s Certification Statement, which should be found on their website.
Q: What if I install new appliances in my vacation home? Are those eligible for the $1,500 tax credit?
A: No. The new appliances must be installed in your primary residence in order to qualify for the energy efficient appliance tax credit.
Q: I’m thinking of installing a solar water heater in my house. Does that qualify for the $1,500 tax credit?
A: Yes! Actually, large investments such as solar heaters, wind energy systems, geothermal heat pumps, and fuel cells are part of a different program, which offers a 30% on the total cost of the system in addition to the appliance credit. Best of all, this one has no limit! This means that if you spend $5,000 on appliances and $10,000 on a new solar heating system, you will receive $1,500 for your appliances and $3,000 on your solar heating system. That’s a total of $4,500 in tax credits!
Q: My credit is worth more than my tax payments! Will the government pay me?
A: As long as the amount of credits you earn is less than your tax liability then it will function as a normal tax write-off. For instance, if your tax liability is $10,000 and you have had $12,000 withheld from your paychecks, you would subtract the $1,500 credit from your original liability, leaving you with $8,500. Therefore, your refund would be the $2,000 you were originally going to get PLUS the $1,500 from the credit. Unfortunately, the tax credit on the appliances does not roll over to the next year – the credit for bigger things (solar heaters, etc.) does, however.
Q: When will the energy tax credit program end?
A: The $1,500 tax credit program will end at the end of 2010. Any unpaid credits on appliances will be cancelled, but credits on larger investments will carry over.
James A. Wheat & Sons has everything you need to know about the federal energy tax credit . And when you are ready to claim your $1,500 text credit, call us and ask about our top of the line energy efficient appliances. You’ll be saving money in no time!