The American Recovery and Reinvestment Act (ARRA) provides numerous
tax incentives for individuals to invest in energy-efficient products.
Some of the more useful ones are:
1) Residential Energy Property Credit (Section 1121):
if you are adding insulation, energy
efficient exterior windows and energy-efficient heating and air
conditioning systems you can receive up to a 30% CREDIT (dollar for dollar) (maximum of $1500) of all the costs!
A similar credit was available for 2007, but was not available in
2008. Homeowners should be aware that the standards in the new law are
higher than the standards for the credit that was available in 2007 and
that The IRS has issued guidance that will allow manufacturers to
certify that their products meet these new standards.
Until the guidance is released, homeowners generally may continue to
rely on manufacturers' certifications that were provided under the old
guidance.
For exterior windows and skylights, homeowners may continue
to rely on Energy Star labels in determining whether property purchased
before June 1, 2009, qualifies for the credit.
2) Residential Energy Efficient Property Credit (Section 1122):
This nonrefundable energy tax credit will help individual taxpayers pay
for qualified residential alternative energy equipment, such as solar
hot water heaters, geothermal heat pumps and wind turbines.
The new law allows for a
credit equal to 30 percent of the cost of qualified property.
3) Plug-in Electric Drive Vehicle Credit (Section 1141):
The new law modifies the credit for qualified plug-in electric drive
vehicles purchased after Dec. 31, 2009.
To qualify, vehicles must be
newly purchased, have four or more wheels, have a gross vehicle weight
rating of less than 14,000 pounds, and draw propulsion using a battery
with at least four kilowatt hours that can be recharged from an
external source of electricity.
The minimum amount of the credit for
qualified plug-in electric drive vehicles is $2,500 and the credit tops
out at $7,500, depending on the battery capacity.
4) Plug-In Electric Vehicle Credit (Section 1142):
The
new law also creates a special tax credit for two types of plug-in
vehicles - certain low-speed electric vehicles and two- or
three-wheeled vehicles. (Like Golf Carts!)
The amount of the credit is 10 percent of the
cost of the vehicle, up to a maximum credit of $2,500 for purchases
made after Feb. 17, 2009, and before Jan. 1, 2012.
To qualify, a
vehicle must be either a low speed vehicle propelled by an electric
motor that draws electricity from a battery with a capacity of 4
kilowatt hours or more or be a two- or three-wheeled vehicle propelled
by an electric motor that draws electricity from a battery with the
capacity of 2.5 kilowatt hours.
A taxpayer may not claim this credit if
the plug-in electric drive vehicle credit is allowable.
More information can be found at the IRS website along with additional information on the ARRA.
If you have any questions on how these new credits could apply to you PLEASE speak with your CPA to get more information (our Tax Goddess can be found here if you have any questions)!
Looking our for your best interests,
Your Tax Goddess~
Shauna~
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