Take advantage of renewed tax credits for efficiency
If you read this in December, there still may be time to take advantage of the federal energy tax credits that Congress renewed earlier this year and get a break on your 2018 and future years’ taxes.
In addition, the credits were renewed retro- actively for 2017, so if you made a qualifying purchase and installation last year, you can still get credit for it on your 2018 return. Go to https://20somethingfinance.com/energy-tax- credits/ or https://www.energy.gov/savings/
residential-renewable-energy-tax-credit or https://www.energystar.gov/about/federal_tax_credits for the full details on the two types of tax credits that have been restored. Also discuss the credits with your tax preparer, who will use the proper forms when filing your return.
Another piece of good news is that the credits can apply over several years, since many taxpayers don’t pay enough tax to “use up” the credits in a single year for some of the qualifying equipment and items.
Also check with your cooperative to see if it offers any rebates for efficiency improvements.
For 2017, 2018 and 2019, the restored Renew- able Energy Tax Credits are for 30 percent of the costs of major energy installations. They are un- limited, meaning no cap on the cost, and include installation labor for qualifying:
- Solar water heaters
- Solar panels
- Geothermal heat pumps
- Small wind turbines
- Fuel cells
The credits decline in 2020 to 26 percent and to 22 percent in 2021. Note that the installations must be in a home you own and live in. No rentals, but second homes qualify.
Congress also reinstated the Residential Energy Property Tax Credits, including 2017. These credits are for 10 percent of the product cost to $500 or a specific amount from $50 to $300 for these eligible appliances and equipment:
- Biomass stoves
- HVAC air circulating fan
- Central air conditioner
- Gas, propane or oil water boiler
- Natural gas, propane or oil furnace
- Gas, oil or propane hot water heater
- Electric heat pump water heater
- Windows, doors, skylights