Many people were disappointed to find that the Credit for Nonbusiness Energy Property was not available for improvements and expenditures made during 2008. The good news is that the credit was reinstated by The American Recovery and Reinvestment Tax Act of 2009, and is available for improvements and expenditures made in 2009 and 2010.

The CNEP can be taken when qualified energy efficient improvements or expenditures are made for your principal residence.

Qualifying changes

4New insulation

4Replacement windows, skylights and doors

4 Central air conditioners

4 Certain water heaters, furnaces or boilers

4 New metal or asphalt roofs specially treated to reduce heat loss

Changes to the CNEP

4Elimination of the lifetime limitation (previously $500)

4Increase in the credit from 10 percent to 30 percent of qualified expenses

4 A raise in the maximum cap to a $1,500 aggregate amount

The American Recovery and Reinvestment Tax Act of 2009 also enhanced the Residential Energy Efficient Property credit.

This credit is allowed for qualified expenditures that produce energy for home use, and the act removed the maximum credit amounts for the following qualified property expenditures for tax years beginning after Dec. 31, 2008:

4 Solar electric (previously capped at $2,000)

4 Small wind energy (previously capped at $500 for each half kilowatt of capacity of wind turbines (not to exceed $4,000)

4 Geothermal heat pump (previously capped at $2,000)

The maximum credit for qualified fuel cell property remains unchanged at $500 for each half kilowatt of capacity.

The REEP credit was previously extended through the 2016 tax year, and applies not only to your principal residence, but also to your vacation home.

Ginga MacLaughlin is a certified public accountant, a certified information technology professional, and a certified information systems auditor with the accounting firm Silas Simmons, LLP in Natchez.