Reminder: 25C Tax Credits Limted by AMT in 2010

This reminder from Energy Star's tax credit FAQ:

"Section 25C" products (which include insulation, windows, doors, roofs, HVAC, and non-solar water heaters, at 30% up to $1,500) are NOT limited by the AMT in 2009, but are currently limited by the AMT in 2010, unless Congress amends the law.

The alternative minimum tax (or AMT) is an extra tax some people have to pay on top of the regular income tax. The AMT provides an alternative set of rules for calculating your income tax. In theory these rules determine minimum amount of tax that someone with your income should be required to pay. If you're already paying at least that much because of the "regular" income tax, you don't have to pay AMT. But if your regular tax falls below this minimum, you have to make up the difference by paying alternative minimum tax. Various tax benefits that are available under the regular tax (like these tax credits) are reduced or eliminated. More information - Alternative Minimum Tax 101

NOTE: 25D tax credits (geothermal, wind, solar) which extend through 2016 are NOT limited by the AMT.

Condo and Co-Op Owners Can Qualify for Tax Credit

This EPA Energy Star FAQ response addresses how condo owners or members of a co-op who use their unit as their primary residence and share the cost of a qualifying energy efficiency improvements to a condo building can claim the improvement's assessment amount for the residential energy efficiency tax credit.

2009 IRS Form 5695 Released, Causing Confusion

The IRS has released the 2009 version of Form 5695 which homeowners must use to claim the tax credit for residential energy efficiency improvements such as HVAC upgrades. The form appears to be factually correct, but extremely confusing while it tries to address the qualifying level for air source heat pumps which changed on February 17, 2009 when ARRA was enacted. HARDI and other industry organizations worked with the EPA's Energy Star staff to issue this clarification which reinforces that air source heat pumps needed an HSPF of 8.5, not 9.0 if installed after February 17, 2009.