Take advantage of energy tax savings
You may still have time in December to take advantage of the federal energy tax credits Congress renewed last year.
In addition, the credits were renewed retroactively, so if you made a qualifying purchase and installation in 2017 and 2018, you may still be able to get credit for it on your 2019 return. Be sure to discuss the credits with your tax preparer, who will use the proper forms when filing your return.
Another piece of good news is that the credits can apply over several years, since many taxpayers don’t pay enough tax to “use up” the credits in a single year for some of the qualifying equipment and items.
Also check with your cooperative to see if it offers any rebates for efficiency improvements.
For 2019, the restored Renewable Energy Tax Credits are for 30 percent of the costs of major energy installations. They are unlimited, meaning no cap on the cost, and include installation labor for qualifying:
• Solar water heaters
• Solar panels
• Geothermal heat pumps
• Small wind turbines
• Fuel cells
Note that the credits decline in 2020 to 26 percent and to 22 percent in 2021. And remember the installations must be in a home you own and live in. No rentals, but second homes qualify.
Congress also reinstated the Residential Energy Property Tax Credits. These credits are for 10 percent of the product cost up to $500 or a specific amount from $50 to $300 for these eligible appliances and equipment:
• Biomass stoves
• HVAC air circulating fan
• Central air condition
• Gas, propane or oil hot water boiler
• Natural gas, propane or oil furnace
• Gas, oil or propane water heater
• Electric heat pump water heater
• Windows, doors, skylights