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The home improvement tax credit was a deduction for American taxpayers who made energy-efficient improvements to their homes. It was established in 2009 and had a maturity of one year. Some states also offered similar incentives. The tax credit is no longer available, but future incentives may be provided.
A home improvement tax credit is a deduction that American taxpayers could take on federal tax returns. The home improvement tax credit had specific requirements, established by the Internal Revenue Service (IRS). In general, tax credits are used to improve your home to make it more efficient and environmentally friendly. A home improvement tax credit reduces a taxpayer’s income, which in turn reduces their tax liability.
Because the home improvement tax credit was part of the American Recovery and Reinvestment Act (ARRA) of 2009, it gave consumers and even businesses an incentive to reduce the amount of energy they use. The incentive was to reduce the tax liability for consumers or businesses. The tax credit was established in 2009 and had a maturity of one year or when the money set aside under the deed ran out.
In addition to federal home improvement credits, some states have offered similar incentives to residents. State incentives included tax credits on state tax returns. Some have also extended incentives for both a federal tax credit and a state tax credit.
Making a home more energy efficient is one way federal taxpayers have been able to take advantage of the tax credit. Improving energy efficiency could be as simple as replacing old appliances with Energy Star-rated appliances, which use less electricity and water. In 2009, homeowners were able to claim a home improvement tax credit of up to $1,500 US Dollars (USD) on their federal tax returns.
Other ways to add energy-efficient improvements to your home that qualify for the tax credit include installing energy-efficient windows. Installing an energy efficient heating and cooling system in your home also qualified you for a home improvement tax credit, as did installing alternative energy sources.
Alternative energy sources include solar panels for home heating and cooling. Solar or wind powered equipment as a source of electricity is another option for the homeowner who has qualified for a tax credit. From energy-efficient appliances to water heaters to renewable energy sources, all of these home improvements have paid off when it comes time to file your federal tax returns.
As of 2010 and 2011, there is no home improvement tax credit. While there is currently no home improvement tax credit or incentive, that doesn’t mean the federal government or even local and state governments won’t provide incentives in the future.
Smart Asset.
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