If you’re considering eligible projects, now’s the time
In addition to your mortgage interest deduction, your home may entitle you to other tax credits this year, including for certain home improvement projects. The tax credits were extended from last year, but at lower levels — and installation (not simply the purchase) must happen before the end of the year for the expense to be eligible.
Energy-efficient home improvements eligible for the federal tax credits include:
- Exterior windows including skylights and storm windows
- Insulation, exterior doors and roofs, including improvements such as caulking, weather stripping and sealing
- HVAC systemsincluding central air, heat pump, furnace, boiler, water heater or biommass stove
To qualify, windows, doors, insulation and roofs must be expected to last no less than five years (a two-year warranty is required to demonstrate this) and must be installed in (or on) your principal residence.
Home improvements made for medical reasons — such as installing entry/exit ramps, modifying hardware on doors, installing railings and support bars in bathrooms, etc. — may also be eligible for tax credits. The “Capital Expenses” section of IRS Publication 502 has more detail.