Homeowners who make energy efficient repairs may be able to take advantage of tax credits. Credits directly reduce the tax owed and will, therefore, save money. This blog offers energy tax credit guidance for Newburyport MA property owners.
Two Different Tax Credits
The Wind, Solar, Geothermal and Fuel Cell Tax Credit
This tax credit can be used for pre-existing properties and new construction, only if used as principal residences. Investment properties do not qualify. Homeowners may apply a credit totaling 30 percent of the cost of repairs completed between January 1, 2011 and December 31, 2011.
The tax credit can be used for the items below:
- Geothermal Heat Pumps
- Solar Panels
- Solar Water Heaters
- Small Wind Energy Systems
- Fuel Cells (up to $500 for each 0.5 kilowatt capacity; other terms apply)
Credit for Energy Efficiency
This credit covers building materials, insulation, windows, skylights, doors, roofs, air circulating fans, furnaces, and hot water boilers. Certain requirements apply, so check the tax laws prior to applying the credit. There are price restrictions on certain upgrades such as windows. Only work completed on principle residences may be used and and only items lasting 5 years or more may be included. In general, the credit is for ten percent of the purchase price up to five hundred dollars total. Once a tax payer reaches the five hundred dollars mark, no additional amount may be applied in any tax year. This is a lifetime limit and not a recurring one.
Energy Tax Credit Guidance For Newburyport MA Property Owners
With all tax items, retain receipts to confirm amounts. Also keep the manufacturer and model number of all items as some have detailed requirements under the tax laws. If you are uncertain of how to figure out this credit or have a lot of credits in your tax return, look into hiring a tax professional. Additional energy tax credit guidance for Newburyport MA property owners is available at the Energy Star website. The information in this blog was prepared by John Wells at Wellsco Realty as is meant only as an overview.