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A well-built and maintained home keeps you warm through the cold chill of winter. As homes age, projects, like replacing windows or upgrading an HVAC system, can make a serious dent in your budget. If you live in an area that gets heavy snowfall, you probably spend time and money every year preparing for the coldest season. Finding opportunities to save on necessary home improvements can be challenging, but tax breaks, rebates and energy incentives can help offset some of the cost of home winterization projects. Before you install new insulation or purchase a hot water heater, take time to check out current tax credits and other rebates or incentives available in your area.

Alternative Energy Nets Federal Tax Credits

Until 2016, the government offered a federal tax credit of up to $500 on the purchase of energy efficient home upgrades like windows, heaters and insulation. For the 2017 tax year, those credits are no longer available. Federal residential energy credits are currently only allowed for the installation of alternative energy sources such as wind turbines, solar electrical equipment, solar hot water heaters or fuel cells. If you're considering adding solar electric equipment or a solar powered hot water heater, you may be eligible for a credit of 30 percent of the costs on your federal tax return. According to the IRS, if the credit is more than your tax owed, it can be carried forward to future years. Don't forget to check at the state and local levels for additional tax breaks when you add solar power to your home.

For Other Home Upgrades, Look for Energy Efficient Rebates

If your home winterization projects don't qualify for tax credits, you may still be able to get some money back through a rebate or incentive program. Many utility companies run energy efficiency incentive programs to encourage homeowners to invest in a more efficient heating and cooling equipment and appliances. To search for information on rebates and incentives, enter your zip code in the Energy Star rebate finder.

Winterizing Home Projects Also Save in Utility Costs

Even if your new windows or insulation don't qualify for tax incentives or rebates, these upgrades can still help you save and improve your home's energy efficiency. According to Energy Star, installing energy efficient windows can save you up to 22 percent in energy costs each year if you live in a northern zone. In short, any home winterization upgrade you make is likely to add value to your home and lower your utility bills.

To keep your home warm and comfortable this winter, it's a good idea to invest in projects that most affect your overall energy consumption. A home energy audit can help you find out where you're spending the most on energy bills. By deciding which projects can net you the most savings and efficiency, you can properly allocate your home improvement budget and also find rebates, incentives or tax credits to help defray a portion of the upfront costs.

Disclosures

This information and recommendations contained herein is compiled from sources deemed reliable, but is not represented to be accurate or complete. In providing this information, neither KeyBank nor its affiliates are acting as your agent or is offering any tax, accounting, or legal advice.

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