Going green can save you some green during tax time. If you are attempting to improve the environment or just cut the cost of your personal energy use, then the tax law may provide a tax benefit for your good citizenship. Kathy Pickering, executive director of The Tax Institute at H&R Block, shares some potential benefits for energy-savers. There are many tax changes that have been implemented, so read on to find out what credits you're still eligible for:
Nonbusiness Energy Property Credit. Energy credits have been reduced, and taxpayers may only claim energy-efficiency credits for up to 10 percent of the cost of various home energy-efficiency improvements. The maximum lifetime credit is $500. If taxpayers already claimed credits equal or greater than $500 in previous years, then they cannot claim the credit on a 2012 return. This credit has been extended through 2013 as part of The American Taxpayer Relief Act.
Residential Energy Efficient Property Credit. A nonrefundable personal credit is available for property used to produce energy in a personal residence located in the US. An example of eligible property for which the credit is allowed is qualified solar electric property (property which uses solar energy to generate electricity inside a dwelling unit; outdoor swimming pools or hot tubs do not qualify). The credit is also available for wind energy property and geothermal heat pumps. For 2009-16, the credit is 30 percent of the cost of qualifying expenditures. There is no annual limit on the credit amount, but only the amount that equals your tax liability can be used in a given year. Any amount that cannot be used is carried forward to future tax years.