ITC – Have you claimed the available Home Energy Credit?

We here at ITC wanted to remind all of the homeowners and taxpayers out there that there is still time this year to take advantage of the Home Energy Tax Credit!

You must make energy saving and/or “green” energy home improvements in order to qualify for a home energy credit.

As a homeowner, you have access to the “NonBusiness” Energy Property Credit. This credit is is claimable if you complete home improvements that are energy efficient. For example:

A) Insulation
B) New “Energy Saver” Windows and/or Doors
C) Furnace
D) Roof

For 2012, the approved tax credit rate is Ten (10) Percent of the cost of the specific energy improvement itself. Now, you are not permitted (in this case) to base this rate on the additional costs of installing the improvements. So for example, if your window and door replacement products cost you $5,000; and it cost you another $2,000 to have them all installed, the approximate tax credit value would be 10% of the product value. In this case, 10% of the $5,000 which equals a $500 Tax Credit.

You are permitted to include the costs of labor and installation in certain cases. When improving residential energy property; such as high efficiency heating and air conditioning systems, water heaters and stoves which burn specific “biomass” fuel. In these cases you are allowed to include installation costs.

It is important to remember the following – the lifetime limit of the credit is only $500!
* And you can only use $200 of that on Window improvements!

If you have claimed a “non-business” energy property credit in the past, since 2005, you must tally up the total of the credits you have received. If that total exceeds $500, than you are not permitted to claim this credit again in 2011.

If you are permitted, and you have completed improvements which do in fact qualify you for the credit; they must be completed and operational at your principal residence (located in the United States) before January 1, 2013.

* So hurry up!!

NOTE – They are many home improvements which are energy efficient related that DO NOT qualify for these tax credits. Make sure to check the manufacturer’s “tax credit certification statement” before you purchase the product!!

If you are an eligible homeowner and can claim this tax credit, you must use IRS Form 5695 on your federal income tax return.

Remember this is a Credit and not a Deduction; so you can either decrease the amount of tax you owe, OR, increase your REFUND!!

Until next time…

ITC