Spending Your Stimulus Money on Qualifying Home Renovations and Improvements

Under the new federal stimulus plan, homeowners can receive a 30 percent tax credit up to $1,500 for the cost of windows, doors, insulation, roofing and other energy-efficient items. The credit applies to purchases make in 2009 and 2010.

In addition, residents who are building a home can get tax credits if they install energy-efficient systems such as solar water heaters and geothermal heat pumps.

There are several elegibility requirements, including:

• Installations placed in service from January 1, 2009 through December 31, 2010.
  


• The improvements must be for taxpayer’s principal residence.
  


• The maximum total amount that can be claimed for all products placed in service in 2009 and 2010 is $1,500.
  
  
• Geothermal heat pumps, solar water heaters, solar panels, fuel cells and windmills are not subject to this cap and are in effect through 2016.
  
  
• Must have Manufacturer Certification Statement to qualify.
  
  
• Taxpayer must save receipt and Manufactuerer Certification Statement.
  

Improvements made in 2009 will be claimed on 2009 taxes. IRS Form 5695 will be available late 2009 or early 2010.