January 11, 2013

Residential Energy Efficiency Tax Credits- Extended to December 2013!

First things first. What is a tax credit? A tax credit is a dollar for dollar value that reduces one's actual tax liability- it is not the same as a tax deduction. Basically, it allows a person that owes taxes to allocate the money that they would otherwise pay, to a different entity for a specific reason.

The American Taxpayer Relief Act of 2012 was signed into law January 2nd, 2013, which encompasses any qualified energy efficiency upgrades installed in 2012 or 2013. The maximum amount that a taxpayer can claim is $500.

What Qualifies and How Much Do I Qualify For?

Upgrade Type

Stipulation

Credit Amount

New HVAC Equipment
16 SEER or greater
$300
Insulation
10% of material cost
$500
Air Sealing
10% of material cost
$500
Electric heat pump water heater
Energy Factor of 2.0 or greater
$300
Natural gas high hot water heater
Energy Factor of .82 or greater
$300
Windows
SHGC of .30
$200

 With this in mind, energy efficiency is easier than ever before!