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People who make energy efficiency improvements to their homes are eligible for a number of tax credits but not nearly as many as are available to small businesses.
According to Peggy Riley, a regional spokeswoman for the Internal Revenue Service, homeowners generally can credit whatever they spend on energy-saving projects to their homes. Insulation, exterior windows, water heaters, heat pumps and central air conditioners are some of the improvements that apply, she said, but the total credit is capped at $500. Certain individual items are capped as well.
And, as with many federal programs, there is a catch. Taxpayers who took a full $500 credit last year may not claim any additional money this year.
More sophisticated improvements, such as a solar hot water system, are eligible for up to $2,000 in tax credits. The system must be installed by a licensed installer, however.
Riley also warned that federal tax credits that are available now are set to expire.
“Congress is considering extending them another year, but who knows if that will happen?” Riley said.
Even though tax season won’t start for several months, energy efficiency tax credits are a hot topic in Washington, D.C., and members of Maine’s congressional delegation are weighing in.
Sen. Olympia Snowe has proposed a bill extending deductions on energy-efficient homes for at least one year. Her Republican colleague Sen. Susan Collins also has introduced legislation aimed at promoting home energy efficiency. The centerpiece of Collins’ bill is a $500 credit for replacing old wood stoves with newer models or pellet stoves.
Any extension of tax credits would be good news for Maine residents, who already are facing a long winter and heating oil prices approaching $5 a gallon.
Fred Bever, spokesman for the Maine Public Utilities Commission, said with all the talk about switching from oil to another heating source, the best thing consumers can do is tighten their homes.
The PUC, through its Efficiency Maine program, offers incentive programs for energy improvements, mostly cash assistance in the form of low-interest or tax-free loans. Many of their programs have seen a big jump in interest recently as homeowners explore all options.
“We had to suspend our program for solar energy improvements,” Bever said. “Most of our programs are running along just fine, but there is a high demand out there.”
Bever said the Maine Home Performance Program, which is linked with Energy Star, connects homeowners with subsidized energy auditors who evaluate homes and suggest improvements. And, he said, the Maine State Housing Authority has a number of incentives available to income-eligible homeowners, most notably its Low Income Home Energy Assistance Program, which provides heating oil. MSHA also offers low-interest loans for energy audits.
Still, Bever said, most tax-incentive programs, whether at the state or federal level, are geared toward small businesses.
“It’s hard to hear that, especially right now,” he said. “But any improvements, whether they are incentives or not, help everyone in the long run.”
erussell@bangordailynews.net
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