Tuesday, January 29, 2013

Residential energy tax credits extended through 2013

The "fiscal cliff bill," passed on 1/1/2013 and officially known as the "American Taxpayer Relief Act of 2012,"  extends terms for several residential energy-related items. This information is for customers who may have made, or are planning to make, energy improvements.

1.  Credit for Energy-Efficient Existing Homes (see page 63 of the Act)
Reinstates tax incentives for qualified residential energy measures placed in service after 12/31/2011 and through 12/31/2013.  The tax credit amount is now 10% of the cost of building envelope improvements, (materials, excluding labor costs) and limited to $200 for windows, and specific dollar limits for heating and cooling equipment. There is a cap on the credit amount of $500 for fiscal years 2006 through 2013 combined; if you have ever claimed this credit in the past, it counts against the $500 limit (but does not affect the $1500 limit available for 2009 and 2010). So, for example, if you claimed $300 in 2007, you can only claim $200 in 2012; if you claimed $800 in 2009, you cannot claim any more credit.  (This is quoted from ASE's website, below.  Like MLGW, ASE is simply attempting to interpret the tax code for homeowners to investigate.)  Late passing of legislation means the IRS is not ready to begin accepting tax filings that include this credit.

2.  Credit for Energy-Efficient New Homes (see page 76 of the Act)  
It did two things--1) extended term to include homes sold in 2012 and 2013 and 2) revised the baseline code from 2003 IECC with supplements to 2006 IECC with supplements.  The $2,000 credit is for the homebuilder. not the buyer.  Typically, EcoBUILD alone does not reach the performance level requirement.

3.  Credits for qualified renewable systems, including solar generation and geothermal heat pumps, are unchanged.  It's still 30% of installed cost for systems placed in service by 12/31/2016.

4.  Incentives for qualified improvements to commercial facilities are unchanged.  It's still $0.60 per square-foot for systems placed in service by 12/31/2013.

For more information:

The actual legislation

Alliance to Save Energy (excellent, user-friendly info interpreting the tax code)

Tax Incentive Assistance Project (more excellent, user-friendly info)

IRS info about delays in filing for some of these incentives

Consumer Reports update

3 comments:

Kaieza Damien said...

Hi there! great stuff here, I'm glad that I drop by your page and found this very interesting. Thanks for posting about solar energy tax credits. Hoping to read something like this in the future! Keep it up!

The credit will allow for 30% of the cost of the eligible property to be taken as a credit against income tax. Eligible property is tangible property that is an integral part of the facility and that “originates with the taxpayer”; or, in other words is new property. Also, the basis of the property is reduced by 50% of the amount of the credit that is taken. Like the PTC, this credit will also flow through a pass-through entity, and can be carried back one year and forward 20 years.

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Layne Adams said...

Hi, nice post. Well what can I say is that these is an interesting and very informative topic about solar energy tax credits. Thanks for sharing your ideas, its not just entertaining but also gives your reader knowledge. Good blogs style too, Cheers!

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