This article was last updated on January 12
[2013 Update] As part of the deal to avert the fiscal cliff, legislated under the American Taxpayer Relief Act (ATRA) of 2012, certain energy tax credits were extended into 2013. You can read this article for an overview of these credits and other 2013 income tax related changes.
- The$500 tax credit for installing energy efficient improvements to existing homes — such as improved HVAC units, windows, furnaces, and heat and water pumps — was extended through 2013. The law also updated the standards that such appliances would need to achieve to be eligible for the incentive.
- New Energy Efficient Homes Credit — The law extends through 2013 the tax incentive for the production of energy efficient homes. To be eligible, new homes must achieve a 30 percent or 50 percent improvement over heating or cooling energy usage of a comparable residence. The level of efficiency determines the value of the credit.
- Energy Efficient Appliance Credit — The tax credit for U.S.-manufactured, energy-efficient appliances was extended through 2013. This credit includes refrigerators, dishwashers and clothes washers.
Source : Lexology
[2009 Economic Stimulus Tax Credits] As a soon to be home owner, I was surprised at the amount of “green” tax credits available in President Obama’s $787 billion economic stimulus package (aka 2009 American Recovery and Reinvestment Act). The $1500 energy efficiency credit has been well publicized, but there are a lot more goodies in there that you could save you a lot of money when it comes to tax returns next year, and reduce your carbon footprint to boot. From the IRS, here are some of the main new and expanded energy efficiency tax credits that all homeowners and car buyers could take advantage off:
Tax Credits for Home Energy Efficiency Improvements Increase: Bigger tax credits for making energy efficiency improvements or installing alternative energy equipment.The Stimulus package provides for a uniform credit of 30 percent of the cost of qualifying improvements up to $1,500, such as adding insulation, energy-efficient exterior windows, and energy-efficient heating and air conditioning systems. The new law replaces the old law combination available in 2007 of a 10-percent credit for certain property and a credit equal to cost up to a specified amount for other property. The new law also raised the limit on the amount that can be claimed for improvements placed in service during 2009 and 2010 to $1,500, instead of the $500 lifetime limit under the old law.
Residential Energy Efficient Property Credit: This nonrefundable energy tax credit will help individual taxpayers pay for qualified residential alternative energy equipment, such as solar hot water heaters, geothermal heat pumps and wind turbines. The new law removes some of the previously imposed maximum amounts and allows for a credit equal to 30 percent of the cost of qualified property.
Plug-in Electric Drive Vehicle Credit: The stimulus bill provides a modified credit for qualified plug-in electric drive vehicles purchased after Dec. 31, 2009. To qualify, vehicles must be newly purchased, have four or more wheels, have a gross vehicle weight rating of less than 14,000 pounds, and draw propulsion using a battery with at least four kilowatt hours that can be recharged from an external source of electricity. The minimum amount of the credit for qualified plug-in electric drive vehicles is $2,500 and the credit tops out at $7,500, depending on the battery capacity. The full amount of the credit will be reduced with respect to a manufacturer’s vehicles after the manufacturer has sold at least 200,000 vehicles.
Plug-In Electric Vehicle Credit: The new law also creates a special tax credit for certain low-speed electric vehicles (including those with two and three wheels). The amount of the credit is 10 percent of the cost of the vehicle, up to a maximum credit of $2,500 for purchases made after Feb. 17, 2009, and before Jan. 1, 2012. To qualify, a vehicle must be either a low speed vehicle propelled by an electric motor that draws electricity from a battery with a capacity of 4 kilowatt hours or more or be a two- or three-wheeled vehicle propelled by an electric motor that draws electricity from a battery with the capacity of 2.5 kilowatt hours. A taxpayer may not claim this credit if the plug-in electric drive vehicle credit is allowable.
Tax credit for plug-in electric drive conversion kits: The credit is equal to 10 percent of the cost of converting a vehicle to a qualified plug-in electric drive motor vehicle and placed in service after Feb. 17, 2009. The maximum amount of the credit is $4,000. The credit does not apply to conversions made after Dec. 31, 2011. A taxpayer may claim this credit even if the taxpayer claimed a hybrid vehicle credit for the same vehicle in an earlier year.
Unless noted above, the criteria for claiming the tax credits are
* Must be “placed in service” from January 1, 2009 through December 31, 2010
* Must be for taxpayer’s principal residence, EXCEPT for geothermal heat pumps, solar water heaters, solar panels, and small wind energy systems (where second homes and rentals qualify)
* $1,500 is the maximum total amount that can be claimed for all products placed in service in 2009 & 2010 for most home improvements, EXCEPT for geothermal heat pumps, solar water heaters, solar panels, fuel cells, and small wind energy systems which are not subject to this cap, and are in effect through 2016
* Improvements made in 2009 will be claimed on your 2009 taxes (filed by April 15, 2010) – use IRS Tax Form 5695 (2009 version) – it will be available late 2009 or early 2010
* If you are building a new home, you can qualify for the tax credit for geothermal heat pumps, photovoltaic’s, solar water heaters, small wind energy systems and fuel cells, but not the tax credits for windows, doors, insulation, roofs, HVAC, or non-solar water heaters.
For more information on the above check out the IRS.gov and Energy Star websites which provide more detailed information.
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– $800/$400 Working Tax Credit
– $8,000 New Home Buyer Tax Credit
– Key Dates to Receive the Economic Stimulus Payments
– Tax Deduction for New Cars up to $49,500