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Tax Technology

Residential Energy Tax Credits for 2012

Summer’s here and if you’ve been thinking about “going green” and making your home more energy efficient, then there’s no time like the present, especially if you take advantage of residential energy tax credits still available to homeowners.

The Residential Energy Efficient Property Credit is available to individual taxpayers to help pay for qualified residential alternative energy equipment, such as solar hot water heaters, solar electricity equipment and residential wind turbines. Qualifying equipment must have been installed on or in connection with your home located in the United States.

Geothermal pumps, solar energy systems, and residential wind turbines can be installed in both principal residences and second homes (existing homes and new construction), but not rentals. Fuel cell property qualifies only when it is installed in your principal residence (new construction or existing home). Rentals and second homes do not qualify.

The tax credit is 30% of the cost of the qualified property, with no cap on the amount of credit available, except for fuel cell property.

Generally, labor costs can be included when figuring the credit. Any unused portions of this credit can be carried forward. Not all energy-efficient improvements qualify so be sure you have the manufacturer’s tax credit certification statement, which can usually be found on the manufacturer’s website or with the product packaging.

What’s Included in the Tax Credit?

    • Geothermal Heat Pumps. Must meet the requirements of the ENERGY STAR program that are in effect at the time of the expenditure.

 

    • Small Residential Wind Turbines. Must have a nameplate capacity of no more than 100 kilowatts (kW).

 

    • Solar Water Heaters. At least half of the energy generated by the “qualifying property” must come from the sun. The system must be certified by the Solar Rating and Certification Corporation (SRCC) or a comparable entity endorsed by the government of the state in which the property is installed. The credit is not available for expenses for swimming pools or hot tubs. The water must be used in the dwelling. Photovoltaic systems must provide electricity for the residence, and must meet applicable fire and electrical code requirement.

 

 

    • Solar Panels (Photovoltaic Systems). Photovoltaic systems must provide electricity for the residence, and must meet applicable fire and electrical code requirement.

 

    • Fuel Cell (Residential Fuel Cell and Microturbine System.) Efficiency of at least 30% and must have a capacity of at least 0.5 kW.

 

We’re happy to help you sort out the tax credits available for your “green” home improvements this summer. Give us a call or email us today!

Accounting Business Tax

Year End Tax Saving Ideas For Individuals – Residential Energy Tax Credits

Residential Energy Tax Credits

If you haven’t taken advantage of energy tax credits for your home, 2011 is your last chance. The credits–10% of cost up to $500 or a specific amount from $50 – $300–expire on December 31, 2011 and only apply to improvements in an existing home that is your principal residence. New construction and rentals do not qualify.

The tax credits are as follows:

  • Energy Star window tax credit: up to $200 maximum
  • Water heater tax credit (includes electric, natural gas, propane, or oil): up to $300 maximum
  • Air conditioner tax credit: up to $300 maximum
  • Insulation, doors, and roof credits: up to the $500 cap
  • Furnace tax credit (includes natural gas, propane, oil, or hot water): $150 maximum. Efficiency must be 95% (up from 90% before the extension)

Caution: Taxpayer is ineligible for this tax credit if this credit has already been claimed by the taxpayer in an amount of $500 in any previous year.

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