For those who have decided to go green and make serious energy-conscious changes to their home, there are credits available come tax time. These non-refundable tax credits are called residential energy credits and there are two credits available, credits for physical improvements made such as windows or doors, and then investments made such as solar panels.
Physical Improvement Credits
The first credit available is called the Nonbusiness Energy Property Credit and it has a lifetime limit of 500 dollars. Only 200 dollars can be applied to windows and only ten percent of improvements install qualify. Energy Star specifications must be met. In addition, the item must be installed in the home you reside in a majority of the time.
Items that qualify include:
· Exterior windows and skylights
· Exterior doors
· Roofing designed to prevent extra heat gain
· Furnaces that run on natural gas or propane
· Hot water Boilers
· Natural gas water heaters
· Central air conditioners
Future Investments Credit
If you purchase solar panels, solar water heaters, wind turbines, geothermal heat pumps, or a fuel cell, then you qualify for the second residential energy credit. These changes can be to any home you own, and you are not required to reside in it a majority of the year. Outside of the fuel cell, there is no limit to how much credit you earn. What there is a limit on, is the amount that qualifies. You will only be able to claim 30 percent of the qualified costs.
If you believe you qualify for this credit, check out an online tax preparation service, and fill out the tax forms you need to see the benefits of helping the Earth.
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