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‚??Going green‚?? less costly with tax credit extension


February 20. 2013 12:48AM
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The voluminous American Taxpayer Relief Act – the series of bills that prevented us at least temporarily from going over the fiscal cliff – has a $500 tax credit for people who purchase a new energy-efficient appliance or plan to install new windows or a furnace in a primary residence.


The non-business energy property tax credit is good for items purchased or home improvements you'll make this year and any purchases you made or work you had performed last year.


A tax credit will reduce your taxes at an even dollar for every qualifying tax credit dollar but will not result in a refund, said Karen Balchunas, who operates several Jackson-Hewitt tax offices in the Wilkes-Barre area.


The tax credit, which has been on the books since 2006 thanks to extensions, is among the most popular ones out there, she said, as many people wind up replacing appliances or furnaces, or insulating their homes.


A lot of people are doing energy-efficient projects to lower their heating bill with the rising fuel costs, Balchunas said. But she warned that not every project will qualify. If there's no Energy Star seal, it doesn't qualify. If the homeowner has previously claimed this deduction for $500, he or she cannot claim it again. Also, the items need to be new, not used.


You will need to claim it on Form 5696 when you file your tax return. It might be best to talk to an accountant if you have any questions.


Also, the credit is good for 10 percent of the cost of the item, with certain maximums set for certain items. Qualifying windows, for example, will net you 10 percent of the cost, up to a maximum of $200. Ask your home improvement contractor, home improvement store or appliance store about the credit and what qualifies.


Balchunas said a receipt and Energy Star sticker are required to get the tax credit, so make sure you save them or make sure you get them from the contractor if you're paying someone to install the product.


Holly Mattern, the office manager of Window World in Duryea, said the extension of the tax credit is good news for those people who want to make their homes more energy efficient and get some help on their taxes at the same time. She said it's also good news for those businesses that sell or install energy efficient windows.


Mattern said customers have come in over the years well aware of the tax credit and said employees in the office believe it has boosted sales over the past few years.


TAX CREDIT

The credit is 10 percent of the cost of the building materials (labor excluded) for insulation, doors that meet Energy Star requirements and roofs (metal roofs with pigmented coating, or asphalt roofs with cooling granules). So if the cost is $5,000, you get the full $500 credit. Other qualifying items, with the maximum tax credit in parentheses are: windows ($200), central air conditioners ($300), heat pumps ($300), and furnaces ($150).





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