It’s never too early to plan for next year’s taxes. Let’s say you’re thinking about doing some energy-saving home improvements soon and want to know what federal tax credits are available and how they work. How would you find out?
You might try the IRS website. I did but, unfortunately, couldn’t find any information about energy credits for 2009.
So what’s a green consumer to do? Google, of course. I found two excellent websites. The Tax Incentives Assistance Project provides loads of information on the raft of energy efficiency incentives in the tax code. They even post a matrix of federal energy tax incentives detailing which types of biomass stoves, duct sealing, and other energy-saving purchases qualify for credits. The website also features information on state incentives --- a hyperlink takes you to a clickable map of the United States.
Another go-to info source is the Energy Star website-- a joint program of the U.S. Environmental Protection Agency and the U.S. Department of Energy.
The Tax Incentives Assistance Project is sponsored by a coalition of public interest nonprofit groups, government agencies, and other nonprofit organizations involved in energy efficiency,the Department of Energy (DOE), and the Environmental Protection Agency (EPA). Energy Star comes to you courtesy of DOE and EPA.
Hallelujah that these groups are giving taxpayers this information. But green consumers still need to do some careful searching to figure out who and what qualifies for the credit in 2009. On these websites, it’s hard to answer two important questions: are there income limits on the credits? And do they survive the AMT? After poking around, I did find answers on the frequently asked questions section of the Energy Star website. There is no income limit (though the credit is not refundable), and the AMT poses no problem, at least in 2009. But if Congress doesn’t amend the law, AMT taxpayers won’t get any benefit from the credits in 2010. My “research” on these credits turned up a rule I wasn’t aware of --- while you can now claim up to $1,500 in home energy credits, any credits you claim in 2009 count towards the limit in 2010. But note that the $1,500 cap doesn’t apply to geothermal heat pumps, solar water heaters, solar panels, fuel cells, and wind generators. And don’t forget that the tax credit for fuel cells is limited to $500 per .5 kW of power capacity.
Sound complicated? It is. There must be better ways to encourage energy savings!
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What’s a Green Consumer to Do?
by
Rosanne Altshuler
on Fri 17 Apr 2009 09:00 AM EDT | Permanent Link
Comments
Re: What’s a Green Consumer to Do?
Green incentives in the Internal Revenue Code have become so complicated that one does wonder if they can be used as to truly reach whatever environmental benefit was intended. Complexity lies in the number of provisions, the temporary nature of some, recent changes, limitations and for several, complicated definitions and verifications. And that is just in the federal income tax! States and some local governments also have incentives. And, not all incentives are in the tax law. All levels of government offer grants - including ones to be distributed by Treasury as part of the recent stimulus legislation (seems odd that the Department of Energy wouldn't be the distributor).
Is all of this complication in the law needed? And, not all energy savings are being rewarded or encouraged in the same way. For example, where are the incentives for employees to work at home rather than drive? Where is the incentive to have an energy efficiency study performed? There are other ways. One I found intriguing is that recently in California, the Air Resources Board created a rule requiring auto repair shops to check tire inflation starting July 2010. According to the ARB website, this rule will provide these annual benefits to California: "Eliminate 700,000 metric tons of greenhouse gas emissions; Reduce the state's fuel consumption by 75 million gallons; and, Extend the average tire's useful life by 4,700 miles." I'm working on finding the data to see how that compares to the cost of a tax credit for a hybrid or plug-in car. I've heard that activities like tire inflation and many other energy efficiencies we could adopt in our homes and offices have tremendous green value and should save energy costs. But, where are the incentives to encourage individuals and businesses to engage in these activities? btw - there is a great resource for incentives offered by the states at: http://www.dsireusa.org/ Re: What’s a Green Consumer to Do?
by
Michael Bindner
on Wed 22 Apr 2009 11:21 AM EDT | Permanent Link
If tax reform happens, green purchasers will come up short if that reform includes the elimination of tax filing for most filers. Preservation of a tax benefit could then take one of two routes - allowing a deduction for employees to be filed on the employer's Business Income Taxes or by exempting such spending from any VAT (which opens a nice can of worms, since many other sectors will then say - why not me?).
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