Going Green Gets You Some Green: Pres. Obama’s Economic Stimulus Plan
Posted by Lisa Carey
How can the new economic stimulus plan save you green on your home or car — as well as many other energy efficient plans for the future? Find out how these savings, credits, deductions and payments translate into real dollars . . . and sense.
Newly elected President Barak Obama moved quickly on his campaign promises of an economic stimulus plan. Not only does this plan offer many tax credits, a stimulus payment, and a few dollars more in the average American’s paychecks, but it also offers valuable tax credits and deductions that those “going green” in their home or car can really appreciate.
Among the greener provisions of the economic stimulus plan are the following tax credits/deductions:
-First-time homebuyers could get a tax credit of up to $8,000 if they buy homes between Jan. 1 and Dec. 1.
-Existing homeowners could get a tax credit of up to $1,500 by making their homes more energy-efficient in 2009 or 2010. Numerous projects would qualify, such as installing energy-efficient windows, doors, furnaces, and air conditioners, or adding insulation. Homeowners can get back 30 percent of their expenses, up to $1,500.
-People who buy new cars in 2009 can deduct the sales taxes from their taxable income*.
At first glance two of these provisions may not necessarily seem like environmentally conscious credits or savings, but let’s look at them a little closer and consider our options.
-First-time homebuyers could get a tax credit of up to $8,000 if they buy homes between Jan. 1 and Dec. 1.
This means first time home buyers now have a credit on their taxes for the year 2009 for homes they purchase between Jan. 1 and Dec. 1 2009. With that $8,000 credit first time home buyers can look at energy efficient alternatives in their new homes, by either making home improvements at purchase/or building homes with energy efficient options in insulation, heating and cooling, water and more. Not only do they have more financial “room” to purchase or build a new home, but they can also make those home improvements that they may want to make their homes more energy efficient or eco-friendly.
-Existing homeowners could get a tax credit of up to $1,500 by making their homes more energy-efficient in 2009 or 2010. Numerous projects would qualify, such as installing energy-efficient windows, doors, furnaces, and air conditioners, or adding insulation. Homeowners can get back 30 percent of their expenses, up to $1,500.
What a wonderful tax credit! In our own home there have been one or two things that are not too expensive that we would like to do to make our home more energy efficient and eco-friendly but just expensive enough that they had to be put off until another day. With this credit existing home owners can now spend the money on energy efficient windows and several other projects and get up to $1500.00 tax credit. This credit is based on 30% of whatever the homeowner spends. With this tax credit homeowners can now make $5,000 in specific energy efficient home improvement projects and as a result they would get a tax credit (like money in their pocket when filing their taxes) of $1500.00. It’s like having a 30% off coupon on all of your projects.
People who buy new cars in 2009 can deduct the sales taxes from their taxable income.
With this deduction, purchasing a new car is just a little bit easier, and can be greener. Now, if you purchase a new car in 2009 you get to deduct the sales tax. For example, if you spend $20,000 on a new car, and have an 8.25% sales tax (as we do in Texas) your sales tax amount is $1,650. This is not a tax credit – but a deduction. Assume your tax bracket is 25%; this 1,650 deduction will save you $412.50. While not as exciting as a tax credit, this little bit of help may assist consumers in choosing a car that is a little more expensive, but also more fuel efficient. As a result they get the tax deduction they want and a car that is better for the environment.
Other energy efficient provisions included in the economic stimulus plan, that are not receiving as much attention as the payments, college credits and tax credits include:
Renewable Energy Incentives: “About 20 billion in tax incentives for renewable energy and energy efficiency over 10 years, including extending tax credits for energy produced from wind, geothermal, hydropower and landfill gas; grants to build renewable energy facilities; tax credits for purchases of energy-efficient furnaces, windows and doors, or insulation; tax credit for families that purchase plug-in hybrid vehicles.”
Public Housing: “$4 billion to repair and make more energy efficient public housing projects.”
Energy Programs: “About $50 billion for energy programs, focused chiefly on efficiency and renewable energy, including $5 billion to weatherize modest-income homes; $6.4 billion to clean up nuclear weapons production sites; $11 billion toward a so-called “smart electricity grid” to reduce waste; $6 billion to subsidize loans for renewable energy projects; $6.3 billion in state energy efficiency and clean energy grants; and $4.5 billion make federal buildings more energy efficient; $2 billion in grants for advanced batteries for electric vehicles.” *
The opportunities here are boundless. Employment in these projects could provide not only new jobs, but opportunities to further our opportunities to make the most of our resources without abusing them. This plan is exciting news for businesses, start ups, states and local governments and the everyday American hoping to find alternatives to fossil fuel use as well as more energy efficient methods of living, playing and working.
*Sources:
Stimulus bill offers workers, businesses tax cuts, By Stephen Ohlemacher, Associated Press Writer
Highlights of House-Senate economic stimulus plan, U.S. News and World Report, Feb. 13, 2009.
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4 Responses to “Going Green Gets You Some Green: Pres. Obama’s Economic Stimulus Plan”
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For solar photovoltaic systems, is the federal tax credit limited to $1500, or 30% of the net cost?
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Ed says:
I decided a while ago insulation (in the walls, not in the attic) is a waste of money with global warming and all. I woud rather have a house that breathes than a tight house that generates indoor pollution.
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I found your blog on Bing, I am very excited about this information, I am also very excited about green ICF homes, I will be checking on your blog very soon
I AM SO JEALOUS FOR CITIZEN IN AMERICA. AS A CITIZEN IN HONG KONG . WE DONT HAVE SUCH ADMINISTRATIVE POLICY AT ALL.