There is an important distinction between a tax deduction and a tax credit. A tax deduction is subtracted from income before total tax liability is computed. A tax credit is subtracted from the total tax liability. This means that they have very different values, with a credit being 3 or more times more advantageous than a deduction. (For example a tax credit of $2,000 for someone in the 28% bracket is equivalent to a tax deduction of $7,142). It pays to go energy efficient!

A tax credit of up to $500 for energy improvements is possible.

Federal Tax Credits for Energy Efficiency

Energy Credits for Homeowners

For new homebuilders a tax credit of $2,000 per home is possible.

For Commercial builders a tax credit of $1.80 per square foot & partial credits also available.

Federal Tax Credits for Energy Efficiency

Energy Credit To Home Builders

On October 3, 2008, President Bush signed into law the “Emergency Economic Stabilization Act of 2008.” This bill extended tax credits for energy efficient home improvements (windows, doors, roofs, insulation, HVAC, and non-solar water heaters). Tax credits for these residential products, which had expired at the end of 2007, will now be available for improvements made during 2009.

Michigan Energy Costs to Jump This Winter