Wednesday, October 14, 2009

In this week's Money Matters: If you have ever thought about doing some home remodeling to save money on energy costs, now is the time to do it.

That's because the Federal Government is offering financial incentives in the form of tax credits.

The credit can be claimed on the homeowners income taxes for 2009 or 2010, whatever year the improvements were purchased.

For instance, upgrade your insulation, widows, doors, roofing, hearing and air conditioning system or water heater and you could qualify for a tax credit for 30% of the purchase price of the product up to a $1,500 maximum credit.

Here are some other things to keep in mind:

1. You must place those purchases in service between January 1, 2009 and December 31, 2010.

2. To qualify all of the products must be used inside a home. That means a pool or hot tub heater doesn't apply.

3. Only improvements made to your principal residence qualify - vacation homes are not considered.

4. The credits don't always cover the cost of installation.

5. Make sure your appliance has an Energy Star Rating. It should come with a manufacturer certification statement saying it qualifies for the tax credit. Keep that and and receipts for your taxes.

For details on what products qualify check the EPA's Energy Star Web site. Some stores, like Lowes and Home Depot also post the information or have links on their Web sites.