How to earn Energy Efficiency Tax Credit

Team Shepherd By Team Shepherd, 29th Dec 2010 | Follow this author | RSS Feed
Posted in Wikinut>Money>Money Saving Tips

A look at purchases and investments through which you can get the Energy Efficiency Tax Credit. Some of these credits are currently running through 2016.

Why should you be energy efficient?

Most of us are aware of the state that this planet is in, the issues with global warming and potential for major lack of sources. If that is not the case then we at least do realize that by saving energy we can also save ourselves money and often lead a healthier life.
Another great benefit of being energy efficient is receiving the current tax credits for energy efficiency. Currently there are a few types of Federal Tax credits.

The 2010 tax credit

The first Tax credit will bring you a return of 30% of the cost up to $1,500 and it expires on Dec. 31 2010. And the following purchases and updates will need to be done in an existing home (not a newly built building) which is your primary residence.

What is covered?

- Biomass stoves, along with their installation, with at least 75% of thermal efficiency.

- Certain types of heating, ventilating and air conditioning.

- All sorts of insulation, including air sealing types of insulation, batting, expanding spray and quite a few more. They should all have a Manufacturers seal in order to be included in the tax credit.

- Asphalt and metal roofs which meet the Energy Star requirements are also covered. Asphalt roofs have to contain cooling granules, while the metal roofs will have certain pigmented coating. These roofs will reflect more of the sun's rays thus keeping the roof temperature down and in turn lessening the amount of heat transferred into the building.

- Certain electric heat pump water heaters are also included in the tax credit, along with their installation costs. Some of the oil, gas and propane heaters, with the energy efficiency of at least 90%, are covered by the tax credit as well. Again the installation costs are included.

- There are many doors, windows and skylights which are considered energy efficient and which can be included in the tax credit. The same goes for improving efficiency with storm doors.

The 2016 tax credit

The second tax credit doesn't run out until Dec. 31 2016, and it offers a credit for 30% of the cost without an upper limit. Both existing homes as well as the new constructions will qualify for this credit. Also, while rental properties do not qualify both principal and secondary residences do.

What is covered?

- In certain cases Solar water heaters are eligible for the tax credit. They have to be certified by the SRCC and provide at least half of the energy for the qualifying property. The said property must be a dwelling and not a pool, hot tub, etc. Also if you have Solar panels (photovoltaic systems) they must provide electricity for your residence.

- All of the Energy Star geothermal heat pumps will qualify for the credit. Some other pumps might qualify as well, and the installation cost is also included in the credit.

- If you have a small wind turbine, of no more than 100 killowatts, which is used for your residence then you can get a tax credit for it along with its installation costs.

Making sure you can claim the Energy Efficiency Tax Credit

There are many products out there and it is always best to educate yourself in order to make the best choice. One that will not only bring you true energy efficiency but one that will reward you for it with a tax credit as well.

These credits can be claimed when you file for your taxes. Currently there is a DRAFT version of a tax form 5695 which you can take a look at on the IRS website. Other than that it is best to consult your tax accountant to make sure you fill out the right forms in order to get your energy efficiency tax credit.

Tags

Earn, Energy Efficient, Energy Saving Tips, Energy Star Rating, Tax, Tax Credits, Tax Efficiency, Tax Strategies

Meet the author

author avatar Team Shepherd
A nomadic freelancer who loves writing about arts and crafts, earning money online and sports.

Share this page

moderator Mark Gordon Brown moderated this page.
If you have any complaints about this content, please let us know

Comments

Add a comment
Username
Can't login?
Password