Saving the Environment and Saving Money Part I – The Residential Energy Tax Credit
Your Tax Savings in 2011 = $500
Thinking about getting a new hot water heater or blowing some insulation into your attic but thought it might cost more than you wanted to spend? If so, the residential energy tax credit is for you!
The residential energy tax credit is for taxpayers who purchase energy efficient improvements (EEI) made to their principal US home. The credit for 2011 is 30% of what you spend up to $500. (E.g. you buy a hot water heater for $500-the tax credit is $150.)
Note: If you claimed the residential energy credit from 2006-2010, you have to reduce the 2011 credit by the amount of the prior year’s credit. Some of the energy efficient items that are eligible for the credit in 2011 include insulation windows, hot water heaters, furnaces, certain roofing, skylights, and central A/C.
If you made energy efficient improvement in 2009 or 2010, you were eligible for a $1,500 credit for qualified EEI items. Do not fret if you forgot to include it on your prior year’s tax return; you have three years from the tax filing deadline to go back and amend your return to claim the credit!
Stuart Steinberg, CPA, MBA has owned a strategic tax planning practice on the North Shore for 23 years. Please feel free to contact him anytime and let Erock Tax take care of you!