CHARLESTON, W.Va. -- Homeowners making improvements to their houses to save money on energy bills can take advantage of tax credits that will save even more. When President Obama signed into law the American Recovery and Reinvestment Act of 2009, also known as the "stimulus bill," the act extended credits to homeowners who made improvements for energy efficiency.

The improvements must be "placed in service," or ready and available for use, from January 2009 through Dec. 31, 2010. They must be for the taxpayer's principal residence, except for geothermal heat pumps, solar water heaters, solar panels and small wind energy systems (where second homes and rentals qualify). Tax credits are available at 30 percent of the cost, with $1,500 as the maximum total amount that can be claimed in 2009 and 2010, except for those items listed above and fuel cells. These items are not subject to the cap, and are in effect until 2016.

Home improvements must have a Manufacturer Certification Statement to qualify, and homeowners need to save receipts and the certification statement for their records. Improvements made in 2009 will be claimed on 2009 taxes (filed by April 15, 2010) using IRS Tax Form 5695.

Qualified homebuilders building new homes can qualify for the tax credit for geothermal heat pumps, photovoltaics, solar water heaters, small wind-energy systems and fuel cells, but not the tax credits for windows, doors, insulation, roofs, HVAC or nonsolar water heaters.

There is no upper or lower limit on income for the credits; however they are "nonrefundable," which means a tax filer can't get more money back in tax credits than they pay in federal income taxes. Also, with multiple improvements, only a maximum of $1,500 over the two-year period of 2009-2010 is available.

"Basically, you can spend up to $5,000 during this two-year period on a single or multiple improvements, and get 30 percent or $1,500 back as a tax credit. If you get the entire $1,500 credit in 2009, then you can't get anything additional in 2010," according to the government's Energy Star help line.

Two or more unmarried people living in the same home who own it jointly each are eligible for the tax credit on the amount of money they each individually spend to make home improvements and file separate tax returns. If a couple has $10,000 of tax-credit-eligible expenses (so they could get a total of $3,000 in tax credits as opposed to just $1,500), they may want to run the numbers to see if filing separately this year will be more beneficial than filing jointly.

Homebuilders 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 and supplements. At least one-fifth of the energy savings must come from building envelope improvements. This credit also applies to contractors of manufactured homes conforming to Federal Manufactured Home Construction and Safety Standards.

Here's a list of improvements, all available for a tax credit of 30 percent of the cost, up to $1,500. For specifications, visit www.energystar.gov:

Insulation: For insulation to qualify, its primary purpose must be to insulate (for example, insulated siding does not qualify). Adding insulation to your home is covered.

Window and doors: Not all Energy Star-labeled windows, skylights and exterior doors qualify for tax credits, so check the Web site before buying.

CHARLESTON, W.Va. -- Homeowners making improvements to their houses to save money on energy bills can take advantage of tax credits that will save even more. When President Obama signed into law the American Recovery and Reinvestment Act of 2009, also known as the "stimulus bill," the act extended credits to homeowners who made improvements for energy efficiency.

The improvements must be "placed in service," or ready and available for use, from January 2009 through Dec. 31, 2010. They must be for the taxpayer's principal residence, except for geothermal heat pumps, solar water heaters, solar panels and small wind energy systems (where second homes and rentals qualify). Tax credits are available at 30 percent of the cost, with $1,500 as the maximum total amount that can be claimed in 2009 and 2010, except for those items listed above and fuel cells. These items are not subject to the cap, and are in effect until 2016.

Home improvements must have a Manufacturer Certification Statement to qualify, and homeowners need to save receipts and the certification statement for their records. Improvements made in 2009 will be claimed on 2009 taxes (filed by April 15, 2010) using IRS Tax Form 5695.

Qualified homebuilders building new homes can qualify for the tax credit for geothermal heat pumps, photovoltaics, solar water heaters, small wind-energy systems and fuel cells, but not the tax credits for windows, doors, insulation, roofs, HVAC or nonsolar water heaters.

There is no upper or lower limit on income for the credits; however they are "nonrefundable," which means a tax filer can't get more money back in tax credits than they pay in federal income taxes. Also, with multiple improvements, only a maximum of $1,500 over the two-year period of 2009-2010 is available.

"Basically, you can spend up to $5,000 during this two-year period on a single or multiple improvements, and get 30 percent or $1,500 back as a tax credit. If you get the entire $1,500 credit in 2009, then you can't get anything additional in 2010," according to the government's Energy Star help line.

Two or more unmarried people living in the same home who own it jointly each are eligible for the tax credit on the amount of money they each individually spend to make home improvements and file separate tax returns. If a couple has $10,000 of tax-credit-eligible expenses (so they could get a total of $3,000 in tax credits as opposed to just $1,500), they may want to run the numbers to see if filing separately this year will be more beneficial than filing jointly.

Homebuilders 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 and supplements. At least one-fifth of the energy savings must come from building envelope improvements. This credit also applies to contractors of manufactured homes conforming to Federal Manufactured Home Construction and Safety Standards.

Here's a list of improvements, all available for a tax credit of 30 percent of the cost, up to $1,500. For specifications, visit www.energystar.gov:

Insulation: For insulation to qualify, its primary purpose must be to insulate (for example, insulated siding does not qualify). Adding insulation to your home is covered.

Window and doors: Not all Energy Star-labeled windows, skylights and exterior doors qualify for tax credits, so check the Web site before buying.

Roofing: Metal roofs and reflective asphalt shingles that meet Energy Star requirements are eligible. The credit is for the cost of the roofing materials only; installation or labor costs are not eligible. Roof coatings are not eligible.

Reflective roofs are not for everyone. They will provide the most benefit in sunny climates where you are using your air conditioner a lot. If your house is already shaded and the roof is not exposed to much sun, then a reflective roof may not provide a significant benefit. The benefits also will be lessened if the attic space is well insulated.

HVAC: This includes upgrades to qualifying Energy Star central air-conditioning units; air source heat pumps; natural gas, propane or oil furnaces; gas, propane or oil water boilers; or advanced main air circulating fans.

Water heaters: All Energy Star gas tankless water heaters qualify. There are currently no Energy Star-qualified gas storage tank or gas condensing water heaters that qualify. All Energy Star electric heat pump water heaters qualify.

Biomass stove: The law defines "biomass fuel" as any plant-derived fuel available on a renewable or recurring basis, including agricultural crops and trees, wood and wood waste and residues (including wood pellets), plant (including aquatic plants), grasses, residues and fibers. A comprehensive list of qualified biomass stoves isn't available, so to verify tax credit eligibility, check the Manufacturer's Certification Statement prior to purchase.

The following items do not have the $1,500 cap and have a "placed in service" deadline of Dec. 31, 2016:

Geothermal heat pump: All Energy Star geothermal heat pumps qualify for the tax credit.

Solar energy systems: For solar water heaters, at least half of the energy generated by the qualifying property must come from the sun. The credit is not available for expenses for swimming pools or hot tubs. Photovoltaic systems must provide electricity for the house, and must meet applicable fire and electrical code requirements.

Small wind energy systems: Includes residential small wind turbines with nameplate capacity of not more than 100 kilowatts.

Products not covered by the tax credit include refrigerators, dishwashers, clothes washers, room air conditioners, ceiling fans, programmable thermostats, electric storage tank water heaters and electric tankless water heaters.

Reach Sara Busse at sara.bu...@wvgazette.com or 304-348-1249.