Energy Tax Credit Guidance For MA Property Owners

There are two different tax credits offered for homeowners who make energy efficient improvements. Credits directly reduce the amount of tax owed and will, therefore, save money. This article provides energy tax credit guidance for MA property owners.

Tax Credit Options

The Wind, Solar, Geothermal and Fuel Cell Tax Credit

This tax credit can be used for pre-existing homes and new construction, if used as principal residences. The credit is not valid for investment properties. Homeowners can apply a credit totaling 30 percent of the cost of repairs completed between January 1, 2011 and December 31, 2011.

The items below qualify for the tax credit

Geothermal Heat Pumps
Solar Panels
Solar Water Heaters
Small Wind Energy Systems
Fuel Cells (up to $500 for each 0.5 kilowatt capacity; other limits apply)

Credit for Energy Improvements

This credit covers building components, insulation, windows, skylights, doors, roofs, air circulating fans, furnaces, and hot water boilers. There are specific requirements for each item, so refer to the tax guidelines before applying the credit. There are maximum deductions on certain upgrades such as windows. Only repairs to principle residences qualify and and only items lasting 5 years or more can be included. In general, the credit is for ten percent of the purchase price up to a maximum of five hundred dollars. Once the five hundred dollars is reached, no additional amount may be applied in any tax year. This is an overall limit and not an annual one.