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Tax credits available for energy-efficient improvements
“Because of the time constraints, homeowners will have to plan carefully,” says Jerrold J. Stern, Ph.D., research fellow with the Real Estate Center at Texas A&M University and an accounting professor at Indiana University. Stern says there are two categories of non-business energy property credit: credit for certain residential energy property expenditures paid during the year, and credit for 10% of the cost of certain energy-efficient improvements (up to $500) installed during the year. To qualify for the credit, the improvements and property must meet specific IRS standards and requirements. Energy property must be new, not used. If the homeowner does not exceed the $500 overall limit, a tax credit for 10% of the cost of qualified energy-efficiency improvements may be available. These items must be new and reasonably expected to remain in use for at least five years. Items that may qualify include insulation material or an insulation system primarily designed to reduce the heat loss or gain of a home; exterior windows (including skylights); exterior doors; and any metal roof installed on a home, but only if this roof has appropriate pigmented coatings that are specifically designed to reduce the heat gain of the home. Homeowners may also take advantage of the residential energy-efficient property credit pertaining to solar and fuel cell property. This credit, which expires in 2008, can result in even higher tax savings. Source: The Real Estate Center at Texas A&M |