Tax Credits for the Energy Saving Consumer
Some of your energy-saving purchases in 2007 may qualify you for a tax credit up to $500, up to $3400 for certain energy-efficient cars and up to $2000 for photovoltaic property or solar water heating property.
It’s tax time again, dreaded by some and loved by others, depending of course if you get a refund or not. If you were an eco-informed consumer in 2007, you may be eligible for a tax credit for your energy-saving purchases. The Energy Policy Act of 2005 (EPACT) is an energy bill that offers consumers and businesses federal tax credits for purchasing fuel-efficient hybrid-electric vehicles and energy efficient appliances and products. Some consumers may also be eligible for state tax credits.
Consumers who purchased and installed specific products, such as energy-efficient windows, insulation, doors, roofs, and heating and cooling equipment in the home can receive a tax credit of up to $500. Improvements must have been installed in or on the taxpayer’s principal residence in the United States. The maximum amount of homeowner credit for all improvements combined is $500 during the two year period of the tax credit. This tax credit applies to improvements made to your primary residence from January 1, 2006 through December 31, 2007.
The EPACT also provides a separate tax credit equal to 30% of qualifying expenditures for purchase for qualified photovoltaic property and for solar water heating property used exclusively for purposes other than heating swimming pools and hot tubs. This credit shall not exceed $2000.
All you need to do is fill out IRS form #5695 – the Residential Energy Credits form. You can download the form here.
Tax credits ranging from $250-$3400 may be available to buyers of energy efficient cars like hybrid gasoline-electric, diesel, battery-electric, alternative fuel and fuel-cell cars. For specifics on which cars qualify and to download the proper form, see the IRS Web site.
In addition to the EPACT tax credits, you may be eligible for state tax credits or rebates and incentives from your local utility company.
Unfortunately the EPACT tax credits end after 2007, so find those receipts and make sure you are rewarded (however small it may be) for the environmentally responsible choices you made in 2007.