11/08/2013
2 types of energy tax credits to take by year end
In February, the federal tax credit was reinstated for energy efficient home improvements made in 2012 and 2013. A tax credit is a direct reduction of taxes due. It can be better than a tax deduction that only reduces taxable income.
The energy tax credit now has a $500 lifetime cap for qualified energy efficient upgrades to your existing principal residence, but the deadline is December 31. New homes and rentals do not qualify. You'll find all the details on: http://www.energystar.gov/taxcredits. The highlights:
1. Tax credits for 10% of the cost. You may claim a tax credit of 10% of the cost of certain energy-saving upgrades. These include qualified insulation, windows, roofs, and doors, with a $200 limit for all doors.
2. Tax credits for the full cost. You can claim tax credits for the full cost of specified types of "qualified residential property," but only up to certain caps. For example:
advanced main air circulating fan – $50
natural gas, propane, or oil furnace or hot water boiler with annual fuel utilization rate of 95 or greater – $150
electric heat pump water heater with minimum 2.0 energy factor – $300
electric heat pump or central air conditioner that achieves the highest efficiency tier of the Consortium for Energy Efficiency – $300 each
natural gas, propane, or oil water heater that has either a minimum energy factor of 0.82 or a minimum thermal efficiency of 90% – $300
biomass stove that uses "plant-derived fuel available on a renewable or recurring basis" – $300
ENERGY STAR products are independently certified to save energy without sacrificing features or functionality. Saving energy helps prevent climate change. Look for the ENERGY STAR label to save money on your energy bills and help protect our environment.
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