Monday, January 7, 2013

Home Insulation Tax Credit Is Back


It’s been kicked out, mothballed, teased, and dragged around but it stowed away in the Fiscal Cliff bill and now it’s back in 2013: the home insulation tax credit. 
  
"26 U.S.C. § 25C Individual Tax Credit for Energy Efficient Residential Improvements and Appliances

The Act also revived the 26 U.S.C. § 25C individual tax credit of 10 percent (up to $500) of the cost of certain energy efficient property improvements, like insulation, windows and doors, and energy efficient heating, cooling and water heating appliances.

The credit had previously applied only property placed in service prior to December 31, 2011. The Act extended this deadline to property placed in service before December 31, 2013, meaning property placed in service in both 2012 and 2013 will now be eligible."

The only potential downside: if you’ve has already claimed this credit of $500 in a previous year, then you’ve maxed out and can’t re-claim.   

Good parts to this, though... 
It applies not only to 2013 but also to 2012--so those who insulated their homes in 2012 can still get credit.  Tax credits for purchase and installation of high-efficiency equipment like water heaters, furnaces, and air conditioners have returned.  Most noteworthy, is that geothermal heat pumps used to be listed among the options in this category.  No longer.  Geothermal has been relocated to the Residential Renewable Energy Tax Credit category and the training wheels have been taken off:

--Still a 30% credit, but now there’s no cap.
--Extended through 2016.
--Home doesn’t have to be primary residence.
--Credit applies to all components of the cost of install.


Here's the link to the Energy Star site with details on claiming the tax credit.  NOTE: It appears that the news of this tax credit extension, or at least the correct document, has not yet made it to the Energy Star or IRS website (as they still have the 2011 form up on their page).  Keep an eye on this website and that IRS page for updates.