There are two different tax credits offered for homeowners who make energy efficient improvements. Credits directly reduce the amount of tax owed and will, as a result, save money. This article provides energy tax credit information for Arlington MA home owners.
Types of Tax Credits
The Wind, Solar, Geothermal and Fuel Cell Tax Credit
This tax credit can be used for existing homes and new construction, only if used as principal residences. Investment properties do not qualify. Homeowners can take a credit totaling 30 percent of the cost of improvements made between January 1, 2012 and December 31, 2012.
The tax credit can be used for the items below:
- Geothermal Heat Pumps
- Solar Panels
- Solar Water Heaters
- Small Wind Energy Systems
- Fuel Cells (up to $500 for each 0.5 kilowatt capacity; other restrictions apply)
Energy Efficiency Repairs
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 refer to the tax guidelines before using the credit. There are maximum deductions on certain items such as windows. Only changes to principle residences qualify and and only items lasting 5 years or more can be included. In general, the credit is for ten percent of the purchase price up to five hundred dollars total. Once a tax payer reaches the five hundred dollars mark, no additional amount may be taken in any future year. This is an overall limit and not a recurring one.
Energy Tax Credit Information For Arlington MA Home Owners
With all tax items, hold on to receipts to document expenses. Also keep the manufacturer and model number of all purchases as some have additional requirements under the tax laws. If you are uncertain of how to figure out this credit or have many credits in your tax return, consider consulting with a tax professional. Additional energy tax credit information for Arlington MA home owners is offered at the Energy Star website. The information in this blog was prepared by Scott Strang at Scott Gregory Group as is intended only as an overview.