There are two different tax credits offered for homeowners who make energy efficient improvements. Credits directly reduce the tax owed and will, as a result, save money. This article offers energy tax credit overview for Bennington home owners.
Tax Credit Categories
The Wind, Solar, Geothermal and Fuel Cell Tax Credit
This tax credit can be applied to pre-existing real estate and new construction, as long as it is used as principal residences. The credit is not valid for investment properties. Homeowners may apply a credit for 30% of the actual cost of improvements completed between January 1, 2011 and December 31, 2011.
The items below qualify for the tax credit
- Geothermal Heat Pumps
- Solar Panels
- Solar Water Heaters
- Small Wind Energy Systems
- Fuel Cells (up to $500 for each 0.5 kilowatt capacity; other terms apply)
Credit for Energy Efficiency
This credit covers building components, insulation, windows, skylights, doors, roofs, air circulating fans, furnaces, and hot water boilers. There are specific requirements for each item, so look up the tax laws before applying the credit. There are price restrictions on certain upgrades such as windows. Only upgrades on principle residences may be used and and only items lasting 5 years or more may be included. In general, the credit is for ten percent of the purchase price up to five hundred dollars total. Once the five hundred dollars is reached, no additional amount may be taken in any tax year. This is a lifetime maximum and not a recurring one.
Energy Tax Credit Overview For Bennington Home Owners
With all tax credits, keep receipts to verify expenses. Also retain records on the manufacturer and model number of all purchases since some have detailed criteria under the tax laws. If you are not sure about how to figure out this credit or have a lot of credits in your tax return, think about using a tax preparer. More energy tax credit overview for Bennington home owners is provided at the Energy Star website. The information in this article was compiled by Troy Richardson at Maple Leaf Realty as is intended only as an overview.