Did you make some energy-efficient home improvements in 2015 or are you considering them for 2016? You may qualify for the home energy tax credit. Here’s how it works:
1 – Non-business Energy Property Credit
You may be eligible to receive a tax credit for 10% of the cost of certain energy-saving items you added to your home last year. This includes items such as insulation, windows, doors and roofs. Alternatively, you may be able to get a tax credit for the actual cost of certain things like water heaters and heating and air conditioning systems. The credit for each type of property has a different dollar limit. According to a recent IRS bulletin:
“Be sure you have written certification from the manufacturer that their product qualifies for this tax credit. They usually post it on their website or include it with the product’s packaging. You can rely on it to claim the credit, but do not attach it to your return. Keep it with your tax records.”
The credit has a maximum lifetime limit of $500, and you may only use $200 of this limit for windows. You can claim the credit on your 2015 tax return if you didn’t reach the lifetime limit in past years. This credit is available through December 31, 2016.
2 – Residential Energy Efficient Property Credit
This tax credit is for 30% of the cost of alternative energy equipment installed in your home. This could include solar hot water heaters, solar electric equipment, wind turbines and fuel cell property. There’s no dollar limit on this tax credit for most types of property. If your credit is more than the tax you owe, you can carry forward the unused portion of this credit to next year’s tax return. This credit is also available through 2016.
For further information on either of these credits, please click here to view form 5695 on the IRS web site.
PLEASE NOTE: THIS ARTICLE AND OVERVIEW IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE LEGAL, TAX, OR FINANCIAL ADVICE. PLEASE CONSULT WITH A QUALIFIED TAX ADVISOR FOR SPECIFIC ADVICE PERTAINING TO YOUR SITUATION.
Source – CMPS Institute