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.

Energy Tax Credit Guidance For MA Property Owners

With all tax credits, retain receipts to confirm amounts. Also document the manufacturer and model number of all purchases since some have detailed requirements under the tax laws. If you are not sure about how to calculate this credit or have many credits in your tax return, think about using the services of a tax preparer. Advanced energy tax credit guidance for MA property owners is provided at the Energy Star website. The details in this blog was compiled by Carl Garcia at Eagle Trust Insurance as is intended only as an overview.