The residential energy credit returns

But not every new window, door, boiler, furnace, heater or roofing improvement will qualify.

Robert D. Flach
by Robert D. Flach, MainStreet contributor

 

NEW YORK (MainStreet) — One of the expired tax breaks extended by the recently passed American Taxpayer Relief Act of 2012 is the cumulative “Nonbusiness Energy Property Credit” for qualified energy efficiency improvements or residential energy property costs for your primary principal residence.

The credit, claimed on IRS Form 5695, is 10 percent of the qualified cost, up to a maximum of $500. This is a “lifetime” limit. If you claimed at least $500 in energy credits from 2006 through 2011 you are not eligible for the credit for 2012.

READ: There are good credit cities and bad credit cities

The credit can be claimed on:

  • Biomass stoves
  • Heating, ventilating and air conditioning (advanced main air circulating fan, air source heat pumps, central air conditioning, gas, propane or oil hot water boiler and natural gas, propane or oil furnace)
  • Water heaters (gas, propane or oil water heater and electric heat pump water heater)
  • Insulation
  • Roofing (metal and asphalt)
  • Windows and doors

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Installation costs are also eligible for the credit on the first three of the above items. Some items have individual limitations of from $50 to $300.

There are very specific “energy efficiency” requirements for each of the items. Not every new window, door, boiler, furnace, heater or roofing improvement will qualify. You can go to the Energy Star website to find out what the specific qualifications are for the individual items.

This credit was extended through Dec. 31 so it will also be available on qualified purchases and improvements made in 2013.