Are You Aware of These Energy Credits?

Energy Efficient Home Improvement Credit

If you make qualified energy-efficient improvements to your home, you may qualify for a tax credit up to $3,200. The credit equals 30% of qualified expenses.

Annual limitations. The following annual limitations apply.

1) The combined credit for all energy efficient home im- provements is limited to $1,200 per year, except for (6), below.

2) The credit for the following is limited to $600 per year.

a) Central air conditioners.

b) Natural gas, propane, or oil water heaters.

c) Natural gas, propane, or oil furnaces or hot water boilers.

d) Improvements or replacement of panelboards, sub- panelboards, branch circuits, or feeders.

e) Windows and skylights.

3) The credit for exterior doors is limited to $250 per year per door and $500 total for all doors.

4) The credit for insulation and air sealing materials or sys- tems specifically and primarily designed to reduce heat loss or gain is limited to $1,200 per year.

5) The credit for home energy audits is limited to $150 per year.

6) Notwithstanding numbers (1) through (2d), above, the credit allowed for heat pumps and heat pump water heaters, biomass stoves and boilers is limited to $2,000 per year.

Labor costs. Labor costs for installing items (2e) through (4), above, do not qualify for the credit.

Primary residence only. Items (2e) through (5), above, only apply to costs associated with your main home.

Home energy audits. A home energy audit includes a written report and inspection. Home energy audits must be conducted by a qualified home energy auditor.

Nonrefundable credit. Any excess credit cannot be ap- plied to future tax years.

Residential Clean Energy Credit

If you invest in renewable energy for your home you may qualify for an annual residential clean energy tax credit.

Qualified expenses. Qualified expenses include the cost of new clean energy property including:

• Solar electric panels.

• Solar water heaters.

• Wind turbines.

• Geothermal heat pumps.

• Fuel cells.

• Battery storage technology (with a capacity of at least 3 kilowatt hours).

Credit amount. The credit equals 30% of the cost of new, qualified clean energy property installed for your home.

Limits for fuel cell property. The credit for fuel cell prop- erty is limited to $500 for each half kilowatt of capacity.

Nonrefundable credit. Any excess credit can be carried forward and applied to future tax years.

Nonrefundable Credit

A nonrefundable credit is limited to the amount you owe in income taxes. It will not decrease your self-employment taxes and cannot give you additional money back as a refund.

This article contains general information for taxpayers and should not be relied upon as the only source of authority.

Taxpayers should seek professional tax advice for more information.