Your Energy Credit May Be All Used Up

The nonbusiness energy property tax credit was extended for one year by Congress in the December tax bill. It allows homeowners a credit for the cost of making certain energy-efficient home improvements.

But before you make a qualifying purchase during 2011, be sure you understand the amount of the credit that will be available to you. It may not be as much as the salesperson touts.

Energy Credit

To understand the issue, you need to understand the history of this credit.

For 2006 and 2007, there was a 10 percent credit for qualifying improvements, subject to a $500 lifetime limit ($200 for windows). During 2008, there was no credit. For 2009 and 2010, the credit rate was 30 percent of the cost of qualifying improvements, subject to a $1,500 limit during those two years combined.

From a monetary perspective, the credit that was extended to 2011 is the 2006-2007 credit, not the 2009-2010 credit. So the rate of the credit available for 2011 is 10 percent, not 30 percent. And the lifetime maximum is $500 – $200 for windows; $50 for each advanced main air circulating fan; $150 for each qualified natural gas, propane, or oil furnace or hot water boiler; and $300 for each item of energy-efficient building property.

You may have already exceeded your lifetime limit in prior years

© 2018 Apex CPAs & Consultants, Inc.   |   1652 E. Main Street, Suite 100, Saint Charles, Illinois 60174  |   Tel 630.584.4555
Admin   |   Upload Docs  |   Client Login