Perpetual Preparedness: American Recovery and Reinvestment Act of 2009

Taxation with representation ain't so hot either. ~Gerald Barzan

Would you like to save money on your 2009 taxes? Then check out the new US Government tax credits for environmental (green) home improvements. The American Recovery and Reinvestment Act of 2009, passed in February, allows homeowners to claim tax credits for up to 30 percent, up to $1500, of the cost of energy-efficient upgrades like windows, doors, roofs and insulation. Tax credits are better than tax deductions. They directly reduce the taxes you owe ($ per $) as opposed to reducing your taxable income.

Because of the double cap, you would have to spend $5000 so that 30% of your cost hits the credit limit of $1500. Now $5000 won’t buy much in home improvement but it could replace some doors or some old windows. Be aware that the work must be completed by Dec. 31, 2010. According to Popular Mechanics,

"Taking advantage of it can be tricky. For example, not all Energy Star–certified doors and windows qualify for the program's strict standards ... Homeowners should keep the Manufacturer's Certification Statement saying the item qualifies for the tax credit"

Window and door replacement must have a U-factor and solar heat gain coefficient (SHGC) of .30 or less, which is more stringent than Energy Star. See http://www.garagewownow.com/ for which garage doors qualify for credit.
All Energy Star metal and asphalt roofs qualify. Download "Find A Product" from Energy Star's "Roof Products" page for more info. Synthetic roofs are not covered.
Insulation installations must last five years or have a two-year warranty. Insulated siding and cladding won't help you with a tax break, but vapor retarders will. It's not clear yet if spray foam and air sealing are covered, according to the EPA.
See the Consortium for Energy Efficiency product directory for qualified types of central Air Conditioners and air source heat pumps. Consult the Gas Appliance Manufacturing Association for natural gas and oil-using heating products. Check pelletheat.org for information on biomass stoves.
See "Residential Water Heaters Key Product Criteria" under Energy Star's "Products'" tab for qualifying Water-heater replacements.

If you have money to spend the following “big projects” are not limited by the $1500 cap. You get credit for %30 of the cost through 2016 but not to exceed your tax liabilities (i.e. no tax refunds via credits).