How Did Homeowners Use the Remodeling Tax Credit?

Because the tax credit in 2009 was limited to $1,500 per taxpayer, not all of this activity generated tax credits.

NAHB previously examined the geographic distribution of 2009 claims of the $1,500 remodeling tax credit.

With respect to the 25C credit for energy-efficient remodeling of existing homes, the data indicate a total of $25.1 billion of qualified expenditures in 2009. This an enormous amount of activity connected to the tax credit program, especially when considering that it's estimated that every $100,000 in remodeling expenditures generates 1.11 full-time jobs.

In fact, according to the IRS data, just a little more than 71% of these costs ($5.404 billion versus potential $7.539 billion) were allowed in the 25C calculation due to the $1,500 limit.

The 25D program, which provides a tax credit for the installation of certain power producing property in new and existing homes, is a somewhat smaller program. For 2009 installations, a total of $738 million of 25D tax credits were claimed (with an additional $69 million of 25D credits carried-forward from prior tax years).

Of this total, 45 percent came from solar panels, 9 percent from solar water heaters, less than 2 percent from wind turbines, a surprising 45 percent from geothermal heat pumps and 1 percent from fuel cell property.

- Courtesy of NAHB