Download Energy Property Credit Residential Energy Efficient Property Credit

Residential Energy Tax Credits
Form 5695; see also IRC §25C and §25D and IRS Pub. 17
See Tab 24 for energy tax incentives for businesses.
Personal (Nonbusiness) Energy
Property Credit
Taxpayers can claim a credit for certain home improvements
placed in service in 2011 (IRC §25C).
This credit for personal energy property
was also available for qualifying improvements placed in service in 2006–2010,
except for 2008.
Allowable credit:
Personal Energy Property Credit—Qualifying Property (2011)
Summary: (1) credit equals 10% of cost of qualified property, (2) $500 credit limit
(aggregate) and (3) taxpayer’s main home only.
improvements and 100% of the cost of
Maximum
certain energy property (subject to limits)
Credit per
Product
Energy Requirements
Item
Must
use
no
more
than
2%
of
the
furnace’s
$ 50
Advanced Main Air
Circulating Fan1 total energy.
• Split systems: HSPF ≥ 8.5; EER ≥12.5;
SEER ≥ 15.
• Package systems: HSPF ≥ 8; EER ≥ 12;
SEER ≥ 14.
Thermal efficiency rating of at least 75% as
measured using a lower heating value.
• Split systems: EER ≥13; SEER ≥ 16.
• Package systems: EER ≥ 12; SEER ≥ 14.
Not all ENERGY STAR products qualify.
Energy factor ≥ 2.0. All ENERGY STAR
qualified electric heat pump water heaters
qualify.
300
AFUE ≥ 95.
Gas, Oil or
Propane Hot Water
Boiler1
Energy factor ≥ 0.82 or a thermal efficiency
Gas, Oil or Propane Water Heater1 of at least 90%.
Must meet 2009 IECC (including
Insulation2, 3
supplements) prescriptive criteria. To qualify,
its primary purpose must be to insulate.
Therefore, insulated siding does not qualify.
AFUE ≥ 95.
Natural Gas or
Propane Furnace1
AFUE ≥ 95.
Oil Furnace1
150
Metal roofs with appropriate pigmented
coatings and asphalt roofs with appropriate
cooling granules that also meet ENERGY
STAR requirements.
In combination with the exterior window/door
over which it is installed: has a U-factor and
SHGC of 0.30 or below and meets the IECC
prescriptive criteria. ENERGY STAR qualifies.
U factor ≤ 0.30; SHGC ≤ 0.30.
ENERGY STAR qualifies.
500
Air Source Heat
Pump1
Biomass Stove1
and 100% of the cost of certain energy
property (subject to limits).
Central Air
Conditioning1
•The credit is equal to 10% of the cost of qualified energy-efficient
property or improvements.
•The credit is limited to (1) $50 for each advance main air circulating fan; (2) $150 for each natural gas, propane or oil furnace or
hot water boiler and (3) $300 for each item of: (a) electric heat
pump water heaters, (b) electric heat pumps, (c) biomass fuel
stoves, (d) high-efficiency central air conditioners or (e) natural
gas, propane or oil water heaters.
•The total amount of credit that can be claimed in 2011 combined is $500 ($200 for exterior windows and skylights). This
amount is reduced (but not below zero) for any credits claimed
in 2006–2010.
•There are no AGI or income limits so all individuals can claim
the credit.
•For 2011, the credit can offset regular tax and AMT.
•The credit is reported on Part I of Form 5695, Residential Energy
Credits.
Qualifying property. See the Personal Energy Property Credit—
Qualifying Property (2011) table in the next column for descriptions of property that qualifies for the credit. The property must be
installed on or in the taxpayer’s principal residence that is located
in the U.S. (new construction, vacation and rental homes don’t
qualify). The improvement must be new (not used) property.
Qualifying property must meet technical requirements related to
energy savings. Taxpayers are not required to determine whether
these requirements are met. Instead, a manufacturer’s certification
statement (that the property meets the technical requirements)
generally is required to claim the credit.
N Observation: For 2009–2011, qualifying
property is slightly different that what qualified in
2006 and 2007. The changes include the addition
of biomass fuel stoves and asphalt roofs (with
appropriate cooling granules) and the removal
of geothermal heat pumps (which now qualify
for the residential energy efficient property credit
discussed in the next column). Also, the technical
requirements regarding energy efficiency for many
types of property have been updated.
Property used partly for business. If the home is used partly for
business (for example, a home office), any qualified expenditure
must be allocated between nonbusiness and business use if the
improvement is used more than 20% for business. If allocation is
required, only the portion of the expenditure allocated to nonbusiness use qualifies for the credit.
12-12 2011 Tax Year | Premium Quickfinder ® Handbook
Electric Heat
Pump Water
Heater1
Roof (Metal and
Asphalt)2, 3
Exterior
Storm Windows &
Doors2, 3
Windows and
Skylights2, 3
300
300
300
300
500
150
150
500
200
Installation costs also qualify. 2 Installation costs not included.
SOURCE: www.energystar.gov. 3 Qualified improvement.
1
Residential Energy Efficient Property Credit
Taxpayers can claim a tax credit for residential energy efficient
property placed in service in 2011. (IRC §25D)
The credit is equal to 30% of the cost of the following property:
•Solar energy systems (water heating and electricity).
•Fuel cells.
•Small wind energy systems.
•Geothermal heat pumps.
There is no limit on the credit amount except in the case of fuel
cells, where the credit limit is $1,000 per kW of capacity. The credit
is claimed in Part II of Form 5695 and is allowed against regular
tax and AMT.
Other rules:
•The credit (other than for fuel cells) is restricted to equipment for
the taxpayer’s personal residence, which must be in the U.S. The
credit for fuel cell property is only available for a principal residence.