April 2010 - Residential Energy Credits
Rita Ray
The Residential Energy Credit has been reinstated for the 2009 year, and is now worth more than in previous years. The non-refundable credit is available for individuals who make energy-conscious purchases to improve the energy efficiency of their home. There are two types: the “Non-business Energy Credit” and the “Residential Energy-Efficient Property Credit”.
The Non-business Energy Credit amounts to 30% of eligible energy-saving home improvements, with a $1,500 maximum for 2009 and 2010 combined. There are certain requirements to claim this credit. These are:
• Each item must meet or exceed criteria established by the 2000 International Energy Conservation Code.
• Each item must be installed in your primary home. A primary home is the home where you live most of the time, including a house, houseboat, mobile home, condominium, manufactured home, or cooperative apartment.
• The expenses must be paid or incurred in the current tax year.
The qualifying items/expenses for this Non-business Energy Credit are:
• Insulation material or systems to reduce heat loss or gain
• Exterior windows, including skylights
• Exterior doors
• Roofing designed to reduce heat gain
• Residential energy property costs, including labor costs to the on-site preparation, assembly or original installation of the property
Natural gas, propane or oil furnaces
Hot-water boilers
Main air circulating fans used in natural gas, propane or oil furnaces
Electric heat pump water heaters
Natural gas, propane or oil water heaters
Electric heat pumps
Geothermal heat pumps
Central air conditioners
The Residential Energy-Efficient Property Credit is also available for investments in alternative energy for your home. The Residential Energy-Efficient Property Credit also equals 30% of qualifying improvement costs, with no dollar limit except for fuel cells. Installation is usually included. The credit is limited to tax liability for 2009, but unused credit may be carried over to 2010. Property and installation costs must be for use in your home located in the United States. Except for fuel cells, the home does not have to be your main home.
The qualifying items/expenses for this Residential Energy-Efficient Property Credit are:
• Solar panels
• Solar water-heaters
• Wind turbines
• Geothermal heat pumps
• Fuel cells, with restrictions:
The fuel cell must be installed on your main home in the U.S.
The fuel cell must have a capacity of at least .5 kilowatt.
The credit cannot exceed $500 for each .5 kilowatt generated.
If you have questions about these credits, please contact your accountant or call Serotta Maddocks Evans & Co., CPA’s. We can help you in claiming these credits when filing your 2009 and 2010 tax returns.