To help the American citizens tide over the prevailing economic conditions the federal government made several changes to the tax tables. One of the changes is tax credits for home energy efficiency and renewable energy incentives.
The energy efficiency tax credit was first introduced in the year 2009 as part of the American Recovery and Reinvestment Act (ARRA). The tax credit still continues and people who have made changes to their existing homes can avail this benefit. This new law enables homeowners to avail tax credits that range between 10 to 30 percent of the cost of all qualifying changes made in an effort to conserve energy. The maximum credit limit has also been increased and the general population now stands to earn up to $1,500.
Lot of people are unsure about the application of these tax credits. The tax credits are applicable on appliances like space heating systems, air conditioning systems and water heating appliances. Home improvements like installing energy efficient windows and insulation also qualify for the tax credits. Vehicle owners who own or rent hybrid gas or electric cars are also eligible for these tax credits, which can go up to $7,500.
The government in an effort to stabilize the economy and help the population take home larger pay checks has introduced the energy efficiency tax credit. This program initiated by the US Environmental Protection Agency and the US Department of Energy is known as the Energy Star program. This tax credit is for individuals and businesses working towards saving energy, and protecting the environment. Here are some of the appliances, improvements and vehicles on which you can claim tax credits.
Individuals and businesses can claim 10 percent of the costs of improvements like weather stripping for windows and doors for better insulation. Installing metal roofs with appropriate pigmented coatings or asphalt roofs with appropriate cooling granules are some of the changes that allow you to claim tax credits of 10 percent of the costs up to $500.
Some of the appliances that are eligible for tax credits are ‘Heat Pumps’ on which you can claim up to $300. Central Air Conditioning which comes with a manufacturer certification statement also qualifies for up to $300 tax credit. Furnaces and water boilers powered by natural gas, propane or oil are also eligible for tax credits from $150 to $300. Gas, oil and propane water heater tax credits can go up to $300.
People who purchased hybrid gas electric vehicles on or before December 31, 2010 can apply for tax credits. These vehicles should meet an emission standard to qualify for tax credits. Plug-In electric drive vehicles qualify for tax credits that range between $2,500 to $7,500. The tax credit for Plug-In electric drive vehicles is only applicable on the purchase of new vehicles. People can also claim tax credits for Plug-In electric drive conversion kits placed in service after February 17, 2009.
Energy Efficiency Systems
One of the best ways to claim tax credit is by installing solar heating panels which meet household needs. Eligibility requirement for these systems is that they should be certified by the government and should meet fire and electrical code standards. Individuals who use geothermal heat pumps can also apply for this federal tax credit which is up to 30 percent of the costs.
If you have made changes in your home or business that help conserve energy you should look up the Internal Revenue Service (IRS) website for details regarding federal tax credits. Not just federal tax but there are several, state tax incentives which you should look into.