The welfare of the environment is becoming increasingly important to the general public as is saving money, partially by reducing energy expenses wholesale, but also by potentially lowering the amount owed on federal income taxes.
Any US citizen who has installed qualified energy-efficient household appliances could end up paying less in federal income taxes this year.
These tax credits were originally a product of the Energy Policy Act of 2005, which sought to improve energy consumption in the United States by ensuring loan availability for companies who were developing technologies to reduce greenhouse gas emissions. It also provided tax incentives for homeowners who made purchases that would boost the energy efficiency of their home. When the bill was first signed into law, the entire program was supposed to end in December of 2011, but it was extended through 2013 thanks to the American Taxpayer Relief Act of 2012. But note, the cut-off date is December 31st of this year, which means that if you’ve been thinking about making any such purchases, you may want to act fast.
If you do meet the criteria, you could be covered for up to 10% of both the initial purchase and installation costs, and best case scenario, you could be looking at a credit of as much as $500. You will, of course, need to able to provide the necessary receipts, certifications from the manufactures of whatever products you have purchased and installed, and this IRS form.
Those eligible for tax credit could get as much as $500 back in credit. You could be eligible if you’ve made one or more of the following home improvements: better insulated exterior windows installed; tighter seal (be it a silicone based caulk or a foam sealant) along door and window frames to improve insulation; wind turbines; or more energy-efficient HVAC equipment (water heaters, furnaces, et cetera).
Be aware that in the case of insulation, the improvements need to hold up for up to five years for the homeowner to qualify for tax credit. It’s important also that the changes were made on the homeowner’s primary residence (or second home), since changes made to rental properties are ineligible for tax credit. Another stipulation is that the changes must have been not only purchased, but also installed sometime between January 2011 and December 31 of this year.
Even if you don’t qualify for these tax credits before the American Tax Payer Relief Act expires, fear not! There are other government programs you may be able to take advantage of, while simultaneously improving the energy-efficiency of their household. Depending on your state of residence, you could be eligible for benefits if you switch over to a renewable energy plan. Websites such as https://www.chooseenergy.com/electricity-locations/illinois and http://www.texaselectricityproviders.com/texas-electricity/ can be very helpful, in terms of helping you select an alternative energy provider. Plus, tax credits will be available until the end of 2016 for homeowners who invest in solar technology (heaters or photovoltaic panels) or wind systems. You can find more comprehensive information through the Energy Star website.
Written on 12/28/2013 by Brandon Engel.
Photo Credit: Andersen Windows