TAX NEWS - 2010

US Tax: Tax Credit For Green Americans

One of the ways that you can get tax breaks from the IRS is to go green, or reduce your reliance on fossil fuels like gasoline. This IRS incentive is made possible through the American Recovery and Reinvestment Act of 2009, which was recently signed into law.

In the new set of laws, there are at least 13 sections for incentives. Some are entirely new laws while others extensions of old laws. Some apply only to businesses and others to individuals. The effective dates of the laws vary, some have antedated dates (January 1 or February 17), while others have effective dates well into the future to 2017. All told, don't jump for joy just yet or buy an electric just yet. Do the math properly so you can sync your purchases with the new tax credits. Keep yourself regularly updated by visiting the IRS website.

The green tax incentives can be claimed through IRS Form 5695. If you currently have green "footprints", you can rely on the Energy Star ratings to claim tax credits. The following tax credits have varying effective dates from January 1 through December 31, 2017.

- Qualified solar electric property – tax credit amounting to 30% of the cost with no limit on the cost of the unit

- Qualified solar water heating property – tax credits amounting to 30% of the cost with no limit on the cost of the unit

- Qualified fuel cell property – tax credit amounting to 30% of the cost with no limit on the cost of the unit. In the alternative, and whichever is less, you can claim $500 for each half kilowatt of capacity of the unit.

- Qualified small wind energy property -  tax credits amounting to 30% of the cost with no limit on the cost of the unit

- Qualified geothermal heat pump property – tax credit amounting to 30% of the cost with no limit on the cost of the unit

On the home front, you can get tax credit up to 30% of the cost of energy-efficient and green versions of the following items: green insulation systems that reduce heat loss/gain, exterior windows including skylights, exterior doors (including garage doors), qualified metal roofs, heating systems, and air conditioning systems. However, the tax credit is capped at $1,500.