The American Recovery and Reinvestment Act of 2009 extended many consumer tax incentives originally introduced in the Energy Policy Act of 2005 (EPACT) and amended in the Emergency Economic Stabilization Act of 2008 (P.L. 110-343) (collectively, the “Acts”). However, these credits are set to expire on December 31, 2010.
The most common credits created/modified/extended under the Acts are the home energy efficiency improvement tax credits. As a general rule, homeowners can claim a credit for 30%, up to $1,500, of the cost of energy saving improvements made to a primary residence. There is no upper or lower limit income for these credits, but the amount of the credit you may claim for 2010 is reduced by any credit claimed in 2009. Common examples of energy saving improvements which may qualify for these credits are furnaces, water heaters, central air conditioners, windows, doors and roofs. Provided these improvements meet certain specifications, the homeowner may be able to claim the credit if placed in service on or before December 31, 2010.
Since not all energy-efficient home improvements are covered under the Acts, homeowners should check the manufacturer’s tax credit certification statement before purchasing or installing any of these improvements. This certification can usually be viewed on the manufacturer’s website or with the product packaging. Note that the manufacturer’s certification is different from the Department of Energy’s Energy Star label. Since not all Energy Star products qualify for the credit, it is especially important to check the certification statement specifically and retain a copy in your tax files.
For a complete listing of the improvements covered under the Acts and their respective specification requirements, please visit EnergyStar.gov’s website located here.
Schneider Downs provides accounting, tax, wealth management and business advisory services through innovative thought leaders who deliver the expertise to meet the individual needs of each client. Our offices are located in Pittsburgh, PA and Columbus, OH.
This advice is not intended or written to be used for, and it cannot be used for, the purpose of avoiding any federal tax penalties that may be imposed, or for promoting, marketing or recommending to another person, any tax-related matter.