The American Taxpayer Relief Act of 2012 extended the credit for non-business energy property through 2013. The general requirements to qualify for the credit were not modified.
The credits can be taken when qualified energy efficient improvements or expenditures are made for your principal residence, including new insulation; replacement windows, skylights, and doors; qualified central air conditioners; certain water heaters, furnaces, or boilers; and a new metal or asphalt roof specifically treated to reduce heat loss. The credit is extended for eligible property placed in service before January 1, 2014. In order to qualify there must be a reasonable expectation that the qualified energy efficient improvements will remain in use for at least five years.
The non-business energy credit is equal to 10% of the cost of qualified energy efficient property or improvements. The maximum credit is equal to $500 after reduction for non-business energy property credits previously allowed after 2005.
There is also the Residential Energy Efficient Property (REEP) credit, which was previously extended through 2016. Both are energy credits available to homeowners; however, the REEP credit involves expenditures for solar electric property; solar water heating property; fuel cell power plants; small wind energy property; and geothermal heat pump property and is equal to 30% of the cost.
For more information, please contact us.