Energy Efficient Improvement to Primary Residence Extended One Year

The 2010 Tax Relief Act extends the nonbusiness energy property credit for one year, through Dec. 31, 2011, This relates to energy efficient improvements to your primary residence located in the US. In 2011, you can claim a 10% credit for qualified energy property placed in service in 2011 up to a $500 lifetime limit (with no more than $200 from windows and skylights) over the aggregate of the credits allowed to the taxpayer for all earlier tax years ending after Dec. 31, 2005.  Basically, if you have taken this credit at any time over the past five years, it is not available to you in 2011.

The credit is equal to the sum of: (1) 10% of the amount paid or incurred by the taxpayer for qualified energy efficiency improvements installed during the tax year, and (2) the amount of the residential energy property expenditures paid or incurred by the taxpayer during the tax year. A taxpayer can claim a credit up to: (i) $50 for an advanced main circulating fan; (ii) $150 for any qualified natural gas, propane, or hot water boiler; and (iii) $300 for any item of energy-efficient property.

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