Tag Archives: department of energy

Energy efficiency can also lead to lower tax bills

Dollar huisjeThe making of energy efficient improvements or installing alternative energy equipment is now made more attractive as U.S. home-owners (and businesses) can be eligible for bigger tax credits. By replacing old doors and windows, installing insulation, re-modeling and building with an eye toward energy efficiency, you don’t only save money over the long run but it may also result in savings in tax. The same goes with venturing into renewable energy sources, like solar energy, micro-turbines and purchasing a hybrid automobile. According to the U.S. Department of Energy, The American Recovery and Reinvestment Act of 2009 extends, expands, and simplifies federal income tax credits for homeowners who make energy efficient home improvements. The law extends consumer tax benefits through 2010; triples the total available tax credit from $500 to $1,500, and increases the tax credit to 30% of the cost of each qualified energy efficiency improvement.

Automobiles

If you were to buy or lease a new hybrid gas-electric or diesel automobile (truck, car or SUV) the tax credit amount could range from $250 to $3,400 depending on the fuel economy and the weight. Some heavy hybrid vehicles, for commercial purposes, are also eligible for tax credits. The tax credit is for vehicles ‘placed in service’ after December 31, 2006 and purchased on or before December 31, 2010. The vehicle tax credit is phased out for each manufacturer once that company has sold 60,000 eligible vehicles. At that point, the tax credit for that company’s vehicles will be gradually reduced over the course of another year. More information, including the list of eligible vehicles, can be found at:
http://www.irs.gov/businesses/corporations/article/0,,id=203122,00.html

Home energy- efficiency improvements
Consumers who purchase and install specific products in existing homes can receive a tax credit for 30% of the cost, up to $1,500, for improvements placed in service starting January 1st, 2009, through to December 31st, 2010. Think of exterior windows, insulation, exterior doors or roofs, central air conditioning, heat pumps, furnaces, boilers, water heaters and bio gas stoves. The improvements must be expected to last at least five years and must be installed in or on the tax payer’s principal residence in the United States. Manufacturers can certify (in packaging or on the company’s web site) which of their products qualify for the tax credit. Retailers, contractors, and manufacturers should be able to help you determine what levels of insulation and what other products qualify.

Geothermal Heat Pumps, Solar Energy, Wind Energy and Fuel Cells
Consumers who install solar energy systems (including solar water heating and solar electric systems), small wind systems, geothermal heat pumps, and residential fuel cell and micro turbine systems can receive a 30% tax credit for systems placed in service before December 31st, 2016.  The cap on geothermal heat pump and solar heaters through 2016 has been removed so that there is no longer a maximum.

For the eligible systems and further information on renewable tax credits, visit:
http://www.energystar.gov/index.cfm?c=products.pr_tax_credits#c6