Energy Tax Credit

Energy Tax Credit

Energy Efficiency Can Equal Tax Credits

New Credit for the Environment-Friendly Homeowners

The U.S. government is coming up with new credits to help the citizens improve their way of living one is the Energy Tax Credit. Actually, this credit is not totally new but was revised for the benefit of the homeowners and the environment.

This is meant for home improvements that aim to lessen the electricity bill. This way, homeowners are encouraged to be eco-friendly thus helping save the environment. The renovations and repairs should be done and completed before the due date and it should have an environment-friendly factor and this means that not all home improvements are qualified for the credit.

It also gives a 30% rebate from the amount spent on certain types of doors, windows and lighting fixtures that are included in the Energy star tax credit. This, however, is only valid for the year of purchase only.

Energy Tax Credit Scope

Being a homeowner is not limited to owning houses only. Those who own condos and co-ops are also considered as homeowners and they are also included in the credit, regardless of their income bracket. Some homeowners may even get federal tax benefits apart from the rebates.

Homeowners who bought certain types of doors and windows that meet the requirements of the Energy Star will be given rebates, provided their date of purchase is from January 4, 2010 onwards.

Utility companies could also give discounts to homeowners who have certain appliances that are included in the list of environment-friendly products

Energy Tax Credit Amendment

This is the combination of the Energy Policy Act of 2005, which was amended in 2008, and the American Recovery and Reinvestment Act of 2009. This was signed by President Obama and it has more coverage than when the law was implemented in 1995 because President Obama aims to lessen the harmful effects of appliances and vehicles to the environment. This new law is beneficial for the homeowners because they have more credits if they use environment-friendly products

Products and appliances that qualify for the credit and are bought from January 1, 2009 to December 31, 2010 have a 30% rebate. These products and appliances should have a certification from the manufacturer and it should contain the product’s code.

Energy Tax Credit Qualifications

To be able to qualify for the credit, the home should be a primary residence. The construction of the house is not qualified but renovations that are done from 2009 to 2010 are qualified for the 30% rebate.

The renovations and repairs could cost up to $1,500.00 and the rebate can only be claimed once. Such renovations, repairs and appliances include asphalt or metal roof, biomass stoves, insulation, sliding glass doors, water heaters, storm doors and storm windows.

The credit also cover repairs of vacation houses or secondary houses with no credit limit and the credit can be claimed every year, provided that it consist of solar panels, solar water heater, geothermal heat pumps or wind energy systems.

Fuel cells could have a tax rebate if it was installed during the construction of the primary residence and not a vacation home. The construction should be done from 2009 to 2010.

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Posted by tax assistant on Friday, December 3rd, 2010. Filed under Personal Tax Issues, Tax Deductions. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry