Energy Property Credits

With spring starting and the housing market improving, many individuals are starting the process of building a new house or purchasing an existing house with plans to remodel. If you’re thinking of making home improvements, here are some tax credits to keep in mind.

Residential Energy Efficient Property Credit

The Residential Energy Efficient Property Credit is available for both new construction and remodeling.  It is equal to 30% of the costs associated with the installation of qualified solar electric property, solar water heating property, small wind energy property, geothermal heat pump property, and fuel cell property. There is no limit on the calculation of the credit and any unused portions of the credit can be carried forward to the next year.

Non-business Energy Property Credit

The Nonbusiness Energy Property Credit was extended through 2013 as part of the fiscal cliff-averting legislation package passed in January. This credit is not available for costs associated with new construction, and only supports remodeling costs. The credit is equal to 10% of the amounts paid or incurred for energy efficiency improvements installed in 2013. Such improvements include new insulation; exterior windows and skylights; exterior doors; advanced main air circulating fans and qualified natural gas, propane or oil furnace or hot water boilers. To be qualified, the residential property must also meet certain energy efficiency requirements. This credit is limited to lifetime amount of $500 with additional limitations by property type.

Both the Residential Energy Efficient Property Credit and the Nonbusiness Energy Property Credit are available only to costs associated with your main residence and cannot be taken on secondary residences.

Ohio Energy Tax Credit Help

Looking to make home improvements this spring? Want to make sure that your sprucing up qualifies for a little help from Uncle Sam? Email Rea & Associates. Our Ohio tax accountants will help you create a tax-saving home improvement plan.

Note: This content is accurate as of the date published above and is subject to change. Please seek professional advice before acting on any matter contained in this article.