The American Taxpayer Relief Act of 2012 passed by Congress on January 3 provides extensions of energy tax credit provisions for homeowners seeking energy-efficiency improvements. Under section 25C, homeowners can claim a $500 maximum tax credit to cover material costs of energy-efficient upgrades to existing homes for all taxable years. The credit is only redeemable if the upgrades are in place by the end of 2013.
If a taxpayer has claimed $500 or more of this tax credit in any year prior to 2013, they may not claim any additional credit. For eligible taxpayers, the tax credit can be applied to any of the following upgrades: additional insulation, energy efficient windows, window films, home sealing (for cracks in the building shell), electric heat pumps, natural gas, oil and propane furnaces, central air conditioning units and air-source heat pumps, natural gas, propane or oil water heaters, biomass fuel property (a stove that burns biomass fuel for heating the home or hot water).
Some other energy efficiency tax credits that went into effect in 2006 and will not expire until Dec. 31, 2016 include those for solar water heat, photovoltaics, wind, fuel cells, geothermal heat pumps, other solar-electric technologies and fuel cells using renewable fuels.
For specific requirements and limitations of the above-listed incentives, please visit the Database of State Incentives for Renewables & Efficiency (DSIRE) website at www.dsireusa.org under “residential energy efficiency tax credit.”