Tax Credits Granted for Energy Management, Energy Efficient Home Improvements, Hybrid Vehicle Purchases

Improving your home’s energy management and energy efficiency comes with a great perk from the government.  Not only will these improvements provide a strong return on investment towards savings on your energy bills, but they will also result in a tax break, by filing Form 5695.

For a number of years, the tax credit benefitted taxpaying homeowners who invested in energy-efficiency upgrades on their home. These energy management upgrades include insulated windows and doors, as well as energy-efficient air conditioning and heating systems.  In 2008, the tax credit for optimizing energy performance wasn’t granted, but it came back in 2009 and 2010, with a higher monetary value for taxpayers.

Home-owning taxpayers who made energy-efficient home improvements are eligible under the American Recovery and Reinvestment Act of 2009 to receive a credit equal to 30 percent of the cost of energy efficient upgrades, with a maximum credit amount of $1500. In previous years, the credit was only $500. 

In order to be eligible for the maximum credit, a homeowner would have to invest $5,000 towards energy-efficient home improvements.  For those who made improvements in previous years and only received $500 or under, the good news is those homeowners can claim their energy-efficient home improvements for this new credit.

In order to qualify for this tax refund, energy-efficient renovations must have been made during 2009.  Individual item limits and income limits don’t exist for this credit, and if you’re beginning renovations in 2010, you’re eligible to file next year for the tax credits.

The government is making tighter regulations and standards for items and renovations to qualify for the credit.  IRS warned that although a product carries the Energy Star label, it may not qualify. It’s the manufacturer’s responsibility to certify that the items qualify.  Keeping a copy of the product’s certification statement is advised by the IRS.

Taxpaying homeowners who install geothermal heat pumps, wind turbines, or solar water heaters and other forms of alternative energy are in for an even bigger tax credit, with a 30% credit and no maximum limit, and the credit extends to preparation and installation costs as well.

Energy efficient tax credits also apply to the purchase of hybrid or alternative energy automobiles for the first 60,000 hybrids each manufacturer sells.  Manufacturers that had hybrids still eligible in 2009 for the tax credit are Saturn, Nissan, Mercury, Mazda, GMC, Ford, Dodge, Chrysler, Chevrolet and Cadillac.  For 2010 cars, hybrids eligible include those from Nissan, Mercedes-Benz, Mercury, GMC, Ford, Chevrolet and Cadillac.

Plug-in electric cars are also eligible for tax credits, and the credit ranges from $2,500 to $15,000 depending on the weight and kind of vehicle, and its battery.

Advanced Control Corporation offers an array of environmentally sound solutions for building automation, energy management, access control, optimizing energy performance and CCTV Solutions. Our experience and continuing work in building automation solutions and security automation solutions give us the skill set necessary to produce optimal results every time for our clientele.