Solomon & Hoover CPAs, PLLC Blog

With the Residential Energy Efficient Property Credit, homeowners can go greener, cheaper. From now through Dec. 31, 2016, certain energy-efficient upgrades to existing homes are eligible for a 30% federal tax credit.

Qualified upgrades include the installation of:

• Solar electric property, such as solar panels,
• Solar water heaters,
• Geothermal heat pumps, and
• Small wind energy devices.

Both equipment and labor costs qualify, and there’s no cap on the amount homeowners can claim. So, for example, you could install several types of energy-efficient equipment for a total cost of $30,000 and receive a $9,000 tax credit. You won’t receive a refund if your credit exceeds your tax liability. But you can carry forward any excess credit to subsequent years through at least 2016, when the credit currently is scheduled to expire.

If you’ve been thinking about making energy upgrades to your home, the Residential Energy Efficient Property Credit provides another incentive. Just be sure you use only eligible equipment with a manufacturer’s tax certification statement. Talk to your tax advisor if you aren’t sure whether your energy-upgrade plans qualify.