You Need to Know About These Two Energy-Related Tax Credits!
It’s tax season once again, which means that we are all feverishly looking for deductions and tax credits in the hopes of getting a big refund check!
Renewable energy and energy efficiency tax credits are just one way to get some help on your tax return this year. These tax credits are a great way for the government to incentivize investment in clean energy technology, and they can save you some serious money if you take full advantage.
Federal Tax Credits Were Recently Extended
At the end of 2015, the U.S. Congress extended two renewable energy tax credits as part of the Consolidated Appropriations Act, meaning that you can qualify for some hefty tax credits this year if you made qualifying renewable energy or energy efficiency upgrades to your home during 2015.
Residential Renewable Energy Tax Credit
If your family wants to take advantage of renewable energy tax credits, you’ll want to start with the Residential Renewable Energy Tax Credit. This is a personal tax credit that allows you to claim up to 30% of the costs of qualified renewable energy systems. Some of the qualifying systems include:
- Small wind-energy systems
- Fuel cell systems
- Geothermal heat pumps
- Solar energy water heaters
- Solar electricity generators
Within these groups, there are limitations and stipulations for qualifying and determining what percentage of the system’s cost can be filed for. Visit energy.gov to learn more about the Residential Renewable Energy Tax Credit.
Residential Energy Efficiency Tax Credit
Previously, this tax credit expired at the end of 2014, but it was retroactively renewed from the start of 2015 until the end of 2016. Since 2015 was included, you can claim energy efficiency purchases during the past year on this year’s tax return!
The following list includes eligible products for tax credits:
- Building envelope improvements
- Insulation materials and systems
- Exterior doors and windows, including skylights
- Roofs—pigmented roofs designed to reduce heat gain and asphalt roofs with cooling granules
- Heating, cooling, and water heating equipment
- Advanced main air circulating fan
- Natural gas, propane, or oil furnace or hot water boiler
- Electric heat pump
- Electric heat pump water heater
- Central air conditioner
- Natural gas, propane, or oil water heater
- Biomass stoves
As with the other tax credit, there are specific requirements that are necessary to fully qualify for this tax credit. Be sure to review the Residential Energy Efficiency Tax Credit requirements before sending in your claim.
Want to learn more about renewable energy or energy efficiency? Check out the rest of our Bright Insights blog for some further reading!
