Energy Tax Credit

energy tax creditEver thought you could be paid to make your house more energy efficient? Well, thanks to the U. S. federal government’s tax credits for energy efficiency, you can now get reimbursed for expenses incurred to increase the energy efficiency of your home or business. We have compiled a brief guide to help you know more about energy tax credits, but you should also consult with a tax specialist to see whether you are eligible for these credits.

Residential Energy Tax Credit

Home improvement projects (including acquisitions of energy efficient appliances) that increase the energy efficiency of your home that have been “placed in service” between January 1st, 2009 and December 10th, 2010, qualify for a credit of 30% of the cost of the improvement – up to a maximum of $1,500. Here are some examples of projects/items: windows and doors, energy saving insulation, roofs, HVAC, water heaters (non-solar) and biomass stoves.

Exempt from this dollar cap are the renewable energy tax credits – credits for installing geothermal heat pumps, solar water heaters, solar panels, fuel cells, and small wind energy systems that can be claimed as tax credit through 2016.

In order to qualify, you must submit the appropriate tax forms (IRS tax forms 5695), have a manufacturer certification statement, and receipts as a proof of purchase.

New home builders can qualify for tax credits for the exempt items like geothermal heat pumps, solar water heaters, solar panels, fuel cells, and small wind energy systems. You can find out more details about the tax credits on this governmental website.

Business energy tax credits

As a tenant or owner of a commercial building, you can get a $1.80 per square foot tax deduction for commercial buildings that are constructed or reconstructed to save at least 50% of the heating, cooling, ventilation, water heating, and interior lighting energy cost of a building that meets ASHRAE Standard 90.1-2001. This deduction has been available since December 2001 and runs through December 31, 2013.

Businesses are also eligible for vehicle energy efficiency tax credits when purchasing or leasing heavy duty hybrid energy efficient vehicles. For details about the qualifying models, you can click on the IRS website that has the official information and forms in regards to this tax credit.