Tuesday, March 24, 2009

**Updated** Q: Are these tax credits limited by the AMT?

A: The original 2006-2007 tax credits were limited by the Alternative Minimum Tax, but the American Recovery and Reinvestment Act of 2009 lifted that limitation for these expanded residential energy efficiency credits for 2009. This tax credit claimed in 2010, however, is still limited by the AMT unless Congress amends the credit again.

The geothermal, solar, and wind upcapped tax credits are also not limited by the AMT through 2016. When these credits are not limited by the AMT, the taxpayer's total tax credit limit is determined by the sum of the taxpayer's tax liability PLUS the AMT.

Wednesday, March 18, 2009

Q: If a homeowner claims a $1,500 credit for installing a qualified appliance, are they still eligible for the solar or geothermal credit?

A: Yes. The capped $1,500 tax credit for most HVAC equipment is separate from the uncapped geothermal, solar, and wind tax credit. For example, a homeowner could install a qualifying water heater and claim 30% of the installation costs up to $1,500 then install a geothermal heat pump and claim up to 30% of that total installation cost as well.

Q: What if two components are being installed but only one qualifies for the tax credit?

A: For example, a non-qualifying central air-conditioning system is installed at the same time as a qualifying gas furnace (or vice versa). In this case, only 30% of the costs, up to $1,500, associated with the furnace installation would qualify for the tax credit. Energy Star just updated their FAQ on this as well.

Saturday, March 14, 2009

Q: Can total installation costs be included in a claim for these tax credits?

A: For HVAC, geothermal, solar, and wind installations, yes, but only material costs qualify for windows, insulation, and roofing improvements. Energy Star recently updated their FAQ site on this point which you can see here.

Thursday, March 5, 2009

Energy Star Updates Answer to Advanced Fan Credit Question

Energy Star recently posted this answer to their FAQ's which was reviewed and approved by the IRS regarding how to determine what qualifies for the advanced main circulating fan tax credit. This is still unresolved but HARDI and other industry groups are working together to expedite a detailed IRS determination.

Q: Are the residential rental properties eligible for these tax credits?

A: For the capped $1,500 credits (most HVAC), no because those are limited only to primary residence equipment replacements. Geothermal, wind, and solar installations are extended to any residence of the taxpayer (doesn't have to be primary) but do not appear to extend to rental properties.