Home Energy Credits Still Available for 2011
December 3, 2011
The IRS recently posted a reminder to homeowners that there is still time this year to make energy-saving and green-energy home improvements and qualify for credit.
The first of these credits, termed “The Nonbusiness Energy Property Credit”, is aimed at homeowners who install energy-efficient improvements such as insulation, windows, and furnaces. The credit is more limited than in the past years, but can still provide substantial tax savings. The following is a summary of this 2011 credit:
- Credit rate is 10% of the cost of qualified energy efficiency improvements, which include adding insulation, energy-efficient exterior windows and doors, and certain roofs.
- Credit can be claimed for the cost of residential energy property, including labor costs for installation (includes certain high-efficiency heating and air conditioning systems, water heaters, and stoves that burn biomass fuel).
- Credit has a lifetime limit of $500 (of which only $200 may be used for windows). If the total of non-business energy property credits taken in prior years since 2005 is more than $500, the credit may not be claimed in 2011.
- Qualifying improvements must be placed into service to the taxpayer’s principal residence located in the United States before January 1, 2012.
- Credit equals 30% of what a homeowner spends on qualifying property, such as solar electric systems, solar hot water heaters, geothermal heat pumps, wind turbines, and fuel cell property.
- No cap exists on the amount of credit available (except for fuel cell property).
- Labor costs are typically included when figuring this credit.
For more information on Home Energy Credits for 2011, contact our office.