I know it’s hard to think about, but April 15th is just around the corner. That means it’s time to start thinking about your taxes. But here’s some good news. If you made energy-efficient home improvements any time in the year 2012, you may be in line for a tax credit of up to $500.
This is all because of the reinstating of the 25C tax credit. Let me explain.
Certain tax incentives for energy-efficient home improvement projects expired on December 31, 2011. But, as part of the deal approved by Congress and President Obama to avoid the ‘fiscal cliff,’ that 25C tax credit was reinstated for 10% (up to $500) of all qualifying purchases made in 2012 and 2013. The $500 cap is for all projects combined.
You’ll notice I said “qualifying” purchases. Here’s what I mean. Air conditioners are one of the home improvement projects eligible for the tax credit. To qualify, your new system must meet these requirements, according to the Air Conditioning Contractors of America:
- Split-system central air conditioners: At least 16 SEER and 13 EER
- Package-system central air conditioners: At least 14 SEER and 12 EER
- Air source heat pumps: At least 15 SEER and 12.5 EER and 8.5 HSPF
- Package heat pump systems: At least 14 SEER and 12 EER and 8 HSPF
There are plenty of other energy-efficient appliances eligible for the 25C tax credit:
- Roofs (Energy Star approved metal roofs)
- Windows (Must meet Energy Star guidelines. Tax credit is good for 10% of the costs of materials, up to $200.)
- Hot water equipment
- Gas furnaces
This tax credit has been a big hit with homeowners in the past. According to the Window and Door Manufacturers Association, the 25C tax credit helped inspired American homeowners to make more than $25 billion in energy-efficient home improvements and upgrades in 2009 alone. That means lots of jobs for small businesses, as well. So it’s a win win for everyone involved.
If you invested in any of these qualifying projects in the past year, you’re probably wondering about the next step to take to claim your tax credit. The Internal Revenue Service has yet to release the 2013 Form 5695 you’ll need to send in. But that information should be available soon, so keep an eye on the news or blogs focused on energy star appliances or general energy efficiency. Your best bet now is to gather all your receipts and paperwork from the companies you did business with so you’ll be ready to go once the form is available.