Q&A: Do my projects qualify for federal tax credits?

Q: I am being required by my village to replace a very costly retaining wall along the back of my property. The cost is in the $80,000 range. I understand that federal tax credits are available. Am I eligible for this? It certainly seems to be a home improvement project as the original railroad tie wall was failing. If so, how do I apply? Additionally, I recently put in a new kitchen with new energy-efficient appliances. Does this tax credit apply to my new kitchen, too?

Natalie Postelnek

A. The tax credit you mention does not apply to your retaining wall or appliances. However, the Long Island Power Authority offers rebates for some Energy Star-rated appliances. For a list of qualified appliances, and to download a mail-in rebate form, click here.

The tax credit is an incentive for homeowners to make energy-efficient home improvements by installing qualified biomass stoves, HVAC systems, insulation, roofs, water heaters, windows and doors. As part of the federal stimulus plan, 30 percent of the material costs up to $1,500 can be subtracted from your tax bill for energy conservation projects that are completed by Dec. 31. The tax credits for energy generating improvements, such as solar panels, geothermal heat pumps or wind energy systems, can be used through 2016. Labor costs aren’t covered.

To apply for these credits, hang onto documentation such as sales receipts, labels and Manufacturer Certification Statements for your tax records, and fill out Form 5695 and enter the total in Line 53 or Form 1040 to claim your credit.