Tax Tips for Energy Savers.
Good news for you in 2017! Congress renewed the previously expired Residential Energy Efficiency Tax Credit and extended the Residential Renewable Energy Tax Credit for solar energy systems as part of the Consolidated Appropriations Act.
This means that any qualified efficiency updates you made in 2016 are eligible for credits when you file your taxes in the coming months. Plus, updates you make in 2017 will be eligible for credits when you file next year. And that solar energy or hot water project you were considering? You may be able to claim a tax credit for 30% of the cost to install one.
RESIDENTIAL ENERGY EFFICIENCY TAX CREDIT
Previously expired at the end of 2015, the efficiency tax credit has now been retroactively renewed from January 1, 2016, through December 31, 2017. If you made energy efficient home improvements last year (or plan to this year), use the list below to find out if your project could save you money.
The following products are eligible for tax credits:
Building envelope improvements
Insulation materials and systems
Exterior doors and windows, including skylights
Roofs—pigmented roofs designed to reduce heat gain, and asphalt roofs with cooling granules
Heating, cooling, and water heating equipment
Advanced main air circulating fan
Natural gas, propane, or oil furnace or hot water boiler
Electric heat pump water heater
Electric heat pump
Central air conditioner
Natural gas, propane, or oil water heater
Biomass stoves
Each of these products has specific requirements to qualify for the tax credit; be sure to review the Residential Energy Efficiency Tax Credit requirements carefully before making a claim on your 2016 taxes or committing to a new purchase in 2017.
RESIDENTIAL RENEWABLE ENERGY TAX CREDIT
If you're planning a renewable home energy project, such as installing a geothermal heat pump, small solar energy system, small wind energy system, or fuel cell property, those tax credits have also recently been modified.
The 30% tax credit for solar electric property and solar water heating property has been extended through 2019, with a gradual decrease in the tax credit amount in successive years through 2021.
There has been no change in the tax credits for fuel cell property, small wind energy property, and geothermal heat pumps. The tax credits are for 30% of qualified expenditures, with no maximum credit (except for fuel cells), and they expire at the end of 2016. Because implementing any of these technologies can entail a good deal of planning, you'd be wise to start now to ensure the systems are placed in service by the end of the year.
