Tax Credits for Adding or Replacing Insulation

Whether it’s summer heat or winter cold, insulation makes your house a lot more livable. From 2009 to 2010, the government helped out, letting you take $1,500 in tax credits for adding insulation. If you took full advantage of this credit, congratulations:

• Be sure to file IRS Form 5695 in 2011.

• Relax, because you’ve taken all the energy credits you’ve got coming.

If you didn’t, and you’re kicking yourself as you shiver in the cold, you still have options.

At the last minute, the government added a suite of less-generous but still useful energy tax credits, available only to those who didn’t take advantage of the 2009-2010 program. Among these is a $500 credit for insulation.

Tax credit limits and deadlines:

• 10% of expenditures, up to $500 for the year, for all energy improvements combined.

• Install the insulation by Dec. 31, 2011—or gamble on another extension.

• Save receipts and labels for Uncle Sam.  By: Gil Rudawsky