Home Energy Credits
Tax Credit for Residential Energy Improvements - Energy property improvements to a principal residence located in the United States and placed in service during before the end of 2010 qualify for the residential energy improvement credit. 2010 is your last chance to “go green” and get Uncle Sam to cover part of the cost in the form of a tax credit.
The credit is 30% of the cost of:
o Qualified advanced main air circulating fan;
o Qualified natural gas, propane, or oil furnace;
o Qualified natural gas, propane, or oil hot water boiler;
o Qualified energy efficient heat pumps;
o Qualified energy efficient water heaters;
o Qualified energy efficient central air conditioners;
o Qualifying insulation;
o Qualified exterior windows including skylights;
o Qualified exterior doors;
o Qualified metal roofs coated with heat-reduction pigments; and
o Qualified asphalt roofing with appropriate cooling granules.
Tax Credit for Residential Energy Efficient Property (REEP credit) – This credit is available for years 2009 through 2016. The installation must be on the taxpayer’s main or second home located in the U.S. A 30% credit with no maximums (except as noted) applies to the following items:
o Qualified solar water heaters;
o Residential solar electric systems;
o Fuel cell equipment – with a maximum credit of $500 for each half-kilowatt of capacity;
o Qualified wind energy equipment; and
o Qualified geothermal energy equipment
Labor costs for onsite installation and for piping and wiring connections are qualifying costs for these credits. However, the credits do not apply to equipment used to heat swimming pools or hot tubs.
Credit limitations – Although these credits can be used to offset both the regular tax and AMT, they are nonrefundable personal credits that can only reduce a taxpayer’s tax to zero, and any remaining balance is not refundable. If the amount of the credit for the residential energy efficient property credit (REEP - i.e., the credit for residential solar and fuel cell equipment and wind/geothermal energy equipment) exceeds the taxpayer’s tax after subtracting other nonrefundable personal credits, the excess can be carried to the next tax year and is added to that year’s allowable credit.
