EnergyStar Tax credits for insulation

[Jay H]

Can anybody explain the process or qualifications of claiming tax credits for home improvement work done in 2006, with respects to adding/replacing worn insulation in my attic? I replaced old insulation with R19 in the attic walls and added unfaced R25 to the floor gaps on top of existing insulation. I saw this on EnergyStar.com:

Tax credits are available for many types of home improvements including adding insulation, replacement windows, and certain high efficiency heating and cooling equipment. See chart. The maximum amount of homeowner credit for all improvements combined is $500 during the two year period of the tax credit. This tax credit applies to improvements made to your primary residence from January 1, 2006 through December 31, 2007.

Scroll down to insulation..
http://www.energystar.gov/index.cfm?c=products.pr_tax_credits#chart

So can I claim the 10% of the price I paid for the insulation for the tax credit. (I certainly qualify for the $500 part, I didn't buy $5000 of insulation!).

Jay

P.s. I didn't think was "HOT" enough for the Ash Can... but certainly not about wood stoves... so I guess I put this here... it is somewhat green cause I have insulated and should be conserving wood..

 

[Harley]

Hi, Jay...

Without getting into a lot of details, it sounds like you may be able to get the credit for 10% of the cost of the insulation... have to finish reading the IRS bulletin myself, but here is the link - its a little wordy.

http://www.irs.gov/pub/irs-drop/n-06-26.pdf

A quick read through it made me a little concerned about the documentation (but that's on some of the other stuff there... not specifically insulation), but - I'll see if I can point you where you need to put it on the form and edit the post here in a little bit - off the top of my head - I think you should be OK

EDIT:

Here's the form you would need to file
http://www.irs.gov/pub/irs-pdf/f5695.pdf

Based on your post only (and I'm assuming you are doing your own returns) - you would mainly be concerned with part 1. Specifically Item 1, and 2a... then just follow the math down to line 12... Part 2 probably doesn't apply, so on line 31 put in the amount from line 12, and take the credit on form 1040, line 52.

You don't need to document anything in the return... I'd just hang onto the reciept and make sure it shows what you bought - you should be fine taking that credit

 

[sgcsalsero]

do you use turbotax, I haven't filed myself and had this question, I did a quick search & came upon this forum, maybe worth checking out http://forums.turbotax.com/intuit/board?board.id=credits06

 

[begreen]

Yeah, we pegged the needle at $500 without any problem. Too bad the $500 is capped at the sum of all improvements. It should be cumulative if they really want it to be an incentive. One could spend $5000 on windows alone without even trying. Oh well, we also get a sales tax deduction this year, so there's something else to add to the schedule. But I prefer credits right off the top.

 

[Jay H]

Thanks all!!

I have always filed my own taxes because I am fairly simple when it comes to income, I work and live in the same state, I don't own stock (no capital gains), no other source of income besides interest (1099-INT) and this is the first year of my mortgage so I got the Mortgage Interest Statement not long ago. So traditionally, I've always done my own state and federal. I have a $6 coupon for Staples (from recycling HP toner cartradges I can scrounge at work for free) that I'm considering buying TurboTax (fed and state) or HR TaxCut which is a bit cheaper... I've heard good things about both and Staples offers a bunch of other free software with it...

I might buy that cause of my coupon...

Jay

 

[Harley]

TurboTax makes a pretty good product. It is pretty easy to use, so I'm sure you'd have no problems with it. Since you are used to doing them manually... you should not have any problems with catching something that might have been entered wrong or put in the wrong place. I believe the "deluxe" version gives you one free state.