Both the Federal Government & the States of Louisiana & Mississippi offer some very attractive tax credits & loan programs to help residents offset some of the costs of making their homes more energy efficient. We have outlined the steps to take to take advantage of this FREE money from the government. Here is a .pdf document outlining programs offered by the Feds & Louisiana in the rebuilding effort. We encourage our customers to take advantage of these programs.
- Step 1:
Use GreenBean Insulation for your insulation needs. For a FREE Estimate, call 504-914-0591 or info@greenbeaninsulation.com
- Step 2:
For the LA HERO program (cash rebate up to $2,000 for existing homes), have your home be H.E.R.S. (an energy blower test) tested by a local energy rater. In New Orleans, call Jeff Haag @ 504-258-5687 or jeff@horizonhec.com. He will assist you in applying for the Louisiana HERO
- Step 4:
For your $500 Federal Tax Credit, fill out IRS form 8908 and submit with your tax returns. Keep your GreenBean receipt with your tax records.
For more information visit: www.irs.gov
- Step 5:
Retain your copies of the certificates & receipts above.
Tax Credit Overview
Residential Builder New Construction Tax
Credit
A $2,000 tax credit for new homes that are at least 50% more efficient
than required by current building codes will encourage builders
(who do not pay the energy bills for the homes they build) to construct
energy-efficient houses, and increase the market for efficient technologies
and practices
Residential
New Construction Tax Credit Requirements
Residential Existing Home
Tax Credit
Consumers who purchase and install specific products, such as energy-efficient
windows, insulation, doors, roofs, and heating and cooling equipment
in their home can receive a Federal tax credit of up to $500 beginning in
January 2006. Louisiana offers the HERO program which offers a cash rebate of up to $2,000 for existing homes. Click here for the Louisiana HERO program.
Residential
Existing Home Federal Tax Credit Requirements
Commercial Tax Deduction
This provision offers business taxpayers a deduction of $1.80 per
square foot for commercial buildings that achieve a 50% reduction
in annual energy cost to the user, compared to a base building defined
by the industry standard ASHRAE/IESNA 90.1-2001.Heating, cooling,
and lighting commercial buildings accounts for about 9% of total
national energy consumption. A tax credit for new and renovated
buildings that use 50% less energy than required by building codes
will encourage owners to install efficient technologies and will
help reduce natural gas and peak electric demand.
Commerical
Tax Deduction Requirements
TAX Credit Most FAQ
- How many tax credits are there?
There are two tax credits and a tax deduction. There is a tax credit for builders on new construction, a tax
credit for homeowners who make energy efficient upgrades to their
existing homes, and a tax deduction for commercial property owners
who reduce energy consumption of their buildings.
- How does a builder get the new construction
tax credit?
A builder must design the house to be 50% more efficient
than a model IECC home. You can use numerous approved computer
software to accomplish this. You must then build the home
to those specifications and have an energy rater come out at do
a performance test on the house.
- How does foam insulation fit into the
new construction tax credit?
The tax credit requires that 1/5 of the efficiency come from building
envelope components, which translates do something to stop air
infiltration.
- Do I have to turn in new paperwork to
the IRS to qualify for either of the two tax credits?
No you must keep your receipts and your documentation
that your home meets the standards but you do not have to file
a ton of new paperwork.
- How much insulation do I need to put
into my existing home to qualify for the tax credit?
Insulation levels must meet the requirements of the
minimum model energy code, which is called the 2004 International
Energy Conservation Code (IECC for short). The 2004 IECC includes
insulation levels for attics, walls, floors, and basements. However,
to qualify for the Federal tax credit, homeowners must only meet
the level of insulation required for the area they are insulating.
For example, a homeowner can choose only to insulate their attic
to the levels required in the 2004 IECC and still be eligible
for the tax credit. For most homeowners, this will mean adding
an additional R-19 to R-30 insulation to their attic. If a homeowner
insulates part of their home to a level below the 2004 IECC, this
would not qualify.
- What is the new construction tax credit?
Home builders are eligible for a $2,000 tax credit for a new energy
efficient home that achieves 50 percent energy savings for heating
and cooling over the 2004 International Energy Conservation Code
(IECC) and supplements. At least 1/5 of the energy savings
must come from building envelope improvements. These tax
credits apply to new homes whose construction is substantially
completed after August 8, 2005 and that are acquired from the
eligible contractor after December 31, 2005 and before January
1, 2008, for use as a residence.
- Is there anything out there for Manufactured
Homes?
Yes there is. There is a $1,000 tax credit to the producer
of a new manufactured home achieving 30 percent energy savings
for heating and cooling over the 2004 IECC and supplements (at
least 1/3 of the savings must come from building envelope improvements),
or a manufactured home meeting the requirements established by
EPA under the ENERGY STAR program. There is a $2,000 tax
credit for the producer who provides a level of heating and cooling
energy consumption that is at least 50 percent below that of a
comparable manufactured home constructed in accordance with the
standards of section 404 of the 2004 Supplement to the 2003 International
Energy Conservation Code (2004 IECC Supplement), and to have building
envelope component improvements that provide for a level of heating
and cooling energy consumption that is at least 10 percent below
that of a comparable dwelling unit.
- What is a tax credit?
You don’t receive an income tax credit when you buy the
product, like an instant rebate. You claim the credit on your
federal income tax form at the end of the year. The credit then
increases the tax refund you receive or decreases the amount you
have to pay.
- Tax credits vs. tax deductions:
In general, a tax credit is more valuable than a similar
tax deduction. A tax credit reduces the tax you pay,
dollar-for-dollar. Tax deductions – such as those for home
mortgages and charitable giving – lower your taxable income.
If you are in the highest 35-percent tax bracket, the income tax
you pay is reduced by 35 percent of the value of a tax deduction.
But a tax credit reduces your federal income tax by 100 percent
of the amount of the credit.
- What energy-efficient home improvements
are eligible for existing homes?
The overall $500 cap can be reached in several ways with the purchase
and installation of energy-efficient products:
- Exterior windows:
10 percent of the total cost, up to $200. Includes skylights
and storm windows.
- Insulation, exterior doors, or pigmented
metal roofs:
10 percent of the cost of the product (but not the installation),
up to $500. Includes seals to limit air infiltration, such
as caulk, weather stripping, and foam sealants, as well as
storm doors.
- Central air conditioner, heat pump,
or water heater:
up to $300 towards the full purchase price, including
installation costs.
- Furnace or boiler:
up to $150 towards the full purchase price, and/or
$50 for an efficient air-circulating fan in a furnace, including
installation cost
- When are they available?
The home improvement tax credits apply for improvements “placed
in service” starting January 1, 2006.
The IRS defines “placed
in service” as when the products or materials are ready
and available for use – this would generally refer to the
installation, not the purchase.
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