By improving the energy efficiency of your home, you’ll make your living environment more comfortable and save money on your ongoing energy expenses. There are several federal tax credits for energy efficient home improvements for which you may qualify.
By investing in renewable energy sources for your home and installing certain types of high-efficiency heating and cooling equipment, you can qualify for a substantial credit on your individual income taxes.
Federal residential renewable energy tax credits, sometimes called energy efficient property credits or residential energy credits, can be applied directly to your personal income taxes for the year in which the equipment was installed.
The credits cover the following types of energy-generation or HVAC systems:
- Solar-powered electricity generation
- Solar-powered water heating
- Small wind energy generation
- Fuel cells using renewable fuels
- Geothermal heat pumps
The tax credit for these systems amounts to 30 percent of the cost of the equipment and installation of the system. There’s no maximum limit on the amount of the credit.
Equipment must be put into use on or before December 31, 2016.
Even equipment that was installed years ago can qualify for the credit, according to the U.S. Department of Energy. For example, solar electric systems, solar water heating systems and fuel cells installed after January 1, 2006 qualify. Wind energy systems and geothermal heat pumps installed after January 1, 2008 qualify. Contact your tax professional for specifics.
Claim your energy-efficiency federal tax credits for the appropriate year using IRS Form 5695.
A general contractor in Newton, MA, Sage Builders, LLC provides top-quality residential design/build, construction and consulting services to Boston-area homeowners. Contact us today for more information on tax credits for energy efficient home improvements and for the equipment that can qualify you for the maximum available credits.
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