Whether you are building a new home or making home improvements, it’s a great time to take advantage of tax credits, rebates and incentives for a greener, more energy efficiency home. Since the passing of the American Recovery and Reinvestment Act of 2009 that was passed in February of this year, the credits you get back have increased quite a bit to encourage people to reduce energy consumption.

You’ve probably heard about these tax credits, but what do they mean for you? First of all, a tax credit directly cuts taxes. The dollar amount of the credit is taken directly off the amount of taxes you owe.

Now for “Energy Efficient Improvements” to your primary residence only, such as (HVAC) heating, ventilation and air, windows, roofing material, insulation and water heaters, you can receive a 30% federal tax credit up to $1500.00. If you spend $5000.00 or more you’ll receive your maximum one time credit of $1500.00 taken directly off the amount of taxes you owe. Cost of installation does not qualify for a tax credit. This federal tax credit is good through December 31, 2010.

For “Alternative Energy” it applies to any home that you own. Alternative energy meaning solar panels, solar water heating, wind turbines, geothermal. You can receive a 30% tax credit on your purchase and installation. There is currently no upper limit on how much you can spend to receive your 30% tax credit.

If you own a commercial building you may be eligible for tax credits up to $1.80 per square foot to go green.

There are also some great tax credits and incentives for builder and manufactured homes that meet energy efficient standards.

Before you begin building or making home improvements, take a look at the Energy Star website. They provide great information on qualifying products, state and local incentives, a rebate locater for your area, Energy Star partners and other helpful money saving tips. Not all Energy Star products qualify for federal tax credits and certain guidelines apply. Also depending on the state you live in and your local utility companies incentives, special offers and rebates will vary.