Some home improvements may be tax deductible, some are not, and some even qualify for a tax credit. Generally, there are three ways a home improvement might benefit you financially on your income tax. Improvements made for medical reasons are tax deductible. If you pay for the improvements with a home equity line of credit then the interest is tax deductible. If you make certain energy upgrades, then you may qualify for a tax credit.
The 2010 qualified energy efficiency improvements result in tax credits which reduce your tax bill dollar for dollar and are thus much more valuable than mere deductions. These improvements include such things as new efficient doors, windows, insulation or roof. You may also get a credit for such equipment as furnaces, water heaters, or fans that get their power from solar, wind, geothermal or fuel cell technology. This is only for your main home located in the USA.