While tax season may be the furthest thing your current top of mind, and understandable so, now may be the perfect time to give it some thought when it comes to important tax incentives and credits. By taking advantage of valuable programs before the year is out, you can realize some big savings for home improvement projects. One very relevant incentive to the home energy industry is the Residential Energy Efficiency Tax Credit.
Like many tax programs our there today, this tax credit can help offset the cost of important efficiency upgrades to your home. The Residential Energy Efficiency Tax Credit provides assistance (in the form of a credit at tax time) of the purchase of high-efficiency heating, cooling and water-heating equipment. There are a few requirements that must be met in order for this tax credit to be claimed on your 2013 return. Efficiency improvements or equipment must be located your primary residence and that residence must be within the United States. Any improvements or equipment purchases must have been made in the calendar year of 2011, 2012 or 2013.
The maximum tax credit covered by this incentive program for all improvements or equipment purchased is $500. The cap includes tax credits for any improvements made in any previous year. If a taxpayer claimed $500 or more of these tax credits in any previous year, any purchases made in 2011, 2012, or 2013 will be ineligible for a tax credit. Many may overlook this tax credit, as it has expired and renewed a few times since its originally 2011 inception. We want to make sure you know that there is still time to take advantage of this deal and save $500 on any home energy and efficiency project you’ve done recently or will do prior to the end of this calendar year.
There are a number of items that qualify for this credit. Things like insulation improvements (both materials and systems), window and door upgrades, and metal roof installation qualify for this energy efficiency tax credit. Furnace purchases, including oil, gas or electric, can qualify for the (up to) $150 of the $500 maximum tax credit if they have an annual fuel utilization rating of 95 percent of higher. New high efficiency heat pumps can get the buyer up to $300 toward the $500 maximum. Many high efficiency water heaters can also contribute to homeowners receiving the highest possible efficiency tax credit amount at tax time.
As mentioned above, this tax credit originally expired at the end of 2011 and was not in place for purchases made during the 2012 calendar year. However, homeowners who made these types of improvements and equipment purchases during that year were (and still are) allowed to retroactively seek those tax credit dollars thanks to the credit extension included in the American Taxpayer Relief Act.
Again, this valuable tax credit will expire on December 31st of 2013, potentially for good this time. We highly encourage you to think about an energy efficiency upgrade in the coming months if you want to receive money credited to your 2013 tax return. Our knowledgeable staff is always available to discuss these types of programs and many more. We’re committed to making sure our customers receive the highest quality for their budgets and needs. Contact us today if you’d like to discuss more.Tags: Conservation and Utility Savings