Like other American homeowners, people who own Chicago condos can take advantage of tax credits offered by the federal government for specialty home improvements, such as making your residence more energy efficient. These credits are available for certain alternative energy upgrades and can significantly increase the amount of money a property owner saves.

Previously available credits that allowed homeowners to claim 30% of energy-efficient hot-water heater or roofing renovations have expired. However, there are other tax credits for similar home improvements that won’t expire until December 31, 2016 that today’s Chicago condo owners can cash in on.

As reported in a Chicago Tribune article this month, homeowners can claim tax credits for 30% of what it costs to outfit your residence with a solar energy system, geothermal heat pump or small wind turbine (not that there’s a lot of room in most Chicago condo buildings to set up a turbine!). According to the Tribune article, which cites information from EnergyStar.gov, there is no ceiling to this tax credit and it can be collected on either existing homes or new construction residences. Rental properties, however, are exempt from the credit.

Anyone looking to make their Chicago condo a little greener, will be happy to know there is also a credit available for 30% of the cost of residential fuel cells (maxed out at $500/0.5 kilowatt of power capacity). Residential fuel cells are an alternative energy system that can cut a home’s utility bills by up to 50 percent.

Owners of Chicago condos might also be able to claim a deduction on taxes, depending on the type of home improvement or repair. It is always wise to keep receipts and talk to an accountant or tax professional about whether future improvements you plan to make are deductible. You never know, someone who is in-tune to government regulations and tax laws may find other deductions you can claim as well.

The cost of green home improvements may seem high to some home and condo owners. However, with the savings on home energy bills, the upfront expense could eventually pay for itself. Planning ahead on such investments by finding out which tax credits or deductions you qualify for in advance will help with budgeting any green home renovations you want to do to your Chicago condo.

There is plenty more information about energy efficient home improvements on the government’s EnergyStar website (energystar.gov) and updated tax deduction options can be found on the IRS website (irs.gov).

This entry was posted on Friday, January 27th, 2012 at 5:00 am and is filed under Home Improvement.