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Green home improvements can save you money

Tuesday - 7/19/2011, 9:25am  ET

WASHINGTON -- There is some good news and some bad news for people who want to fix up their homes. The good news is that the federal government offers two different tax credits for energy-saving home improvements. The bad news is that those tax credits have dwindled since last year.

Purchasing high efficiency central air conditioners and electric heat pumps and water heaters yields a 100 percent tax credit, subject to an overall $500 credit cap, for example. The 2010 cap was $1,500. Certain other expenses get a 10 percent credit, compared to 30 percent last year.

The current tax law will expire at the end of the year unless Congress reaches a deal, reports Smart Money Magazine.

A quick rundown of expenditures qualified for the 10 percent credit: Exterior windows including skylights and storm windows, exterior doors including storm doors, metal and asphalt roofs with heat-reducing components and insulation.

The following additional equipment is qualified for a 100 percent credit: Water heaters that run on natural gas, propane or oil and biomass fuel stoves. Also, advanced main circulating fans used in natural gas, propane and oil furnaces.

Maryland residents can check the Energy Administration's website for more information in their state. Virginia residents can see the state's Energy Efficiency Rebate Program online and D.C. homeowners should consult Green Energy DC.

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