Look up in the attic for next year's tax deduction

[jpak]

http://www.chicagotribune.com/news/chi-ap-greentaxcredit-homeow,0,6223956.story

NEW YORK - Before you put your 2008 tax documents up in the attic, think about the $1,500 you could save on next year's returns if you added extra insulation or a skylight.

Congress tripled the tax credit for energy-efficiency home improvements when it passed the latest stimulus plan. The tax credit now covers up to 30 percent of the cost of products installed this year and next.

The list of big-ticket items it covers is long: windows, outside doors, metal or asphalt roofs, heating and cooling equipment and fuel cell batteries, among others.

But if you were hoping it included the new Energy Star-rated refrigerator or washing machine you're eyeing, no luck. Though some state and local programs might.

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[merh]

1. I don't understand this limitation

These items must be placed in service after Dec. 31, 2005, and before Jan. 1, 2008.

I put a metal roof on my house in march of last year - I don't get the credit. :(

[NMDemDist2]

2. why not? do the paperwork and send it in. n/t

[merh]

3. Because the IRS has limited the time period

See their guidelines

Treasury and IRS Provide Guidance for Energy Credits for Homeowners


IR-2006-34, Feb. 21, 2006

Washington — The Treasury Department and the IRS today have issued guidance (Notice 2006-26) on the certification that homeowners may rely on when they claim credits for purchases that make their homes more efficient.

During 2006, individuals can make energy-conscious purchases that will provide tax benefits when filling out their tax returns next year. The credit will also be available for purchases in 2007. Manufacturers offering energy efficient items such as insulation or storm windows can assure their customers that their energy efficient items will qualify for the tax credit if certain energy efficiency requirements are met.

A recent tax law change provides a tax credit to improve the energy efficiency of existing homes. The law provides a 10 percent credit for buying qualified energy efficiency improvements. To qualify, a component must meet or exceed the criteria established by the 2000 International Energy Conservation Code (including supplements) and must be installed in the taxpayer’s main home in the United States.

The following items are eligible:

*
Insulation systems that reduce heat loss/gain
*
Exterior windows (including skylights)
*
Exterior doors
*
Metal roofs (meeting applicable Energy Star requirements).

In addition, the law provides a credit for costs relating to residential energy property expenses. To qualify as residential energy property, the property must meet certification requirements prescribed by the Secretary of the Treasury and must be installed in the taxpayer’s main home in the United States.

The following items are eligible:

*
$50 for each advanced main air circulating fan
*
$150 for each qualified natural gas, propane, or oil furnace or hot water boiler
*
$300 for each item of qualified energy efficient property.

The maximum credit for all taxable years is $500 — no more than $200 of the credit can be attributable to expenses for windows.

Additionally, the new law makes a credit available to those who add qualified solar panels, solar water heating equipment, or a fuel cell power plant to their homes in the United States. In general, a qualified fuel cell power plant converts a fuel into electricity using electrochemical means, has an electricity-only generation efficiency of more than 30 percent and generates at least 0.5 kilowatts of electricity.

Taxpayers are allowed one credit equal to 30 percent of the qualified investment in a solar panel up to a maximum credit of $2,000, and another equivalent credit for investing in a solar water heating system. No part of either system can be used to heat a pool or hot tub.

Additionally, taxpayers are also allowed a 30 percent tax credit for the purchase of qualified fuel cell power plants. The credit may not exceed $500 for each .5 kilowatt of capacity.

These items must be placed in service after Dec. 31, 2005, and before Jan. 1, 2008.



Page Last Reviewed or Updated: February 04, 2008

http://www.irs.gov/newsroom/article/0,,id=154657,00.html