Energy Savings Tax Credits and Rebates
Written by: Bill Herren
Green energy is the preferred choice for those who want to ensure a safe, pollution free environment for future generations. In order to encourage consumers to select energy-efficient appliances and eco-friendly home additions, the U.S. government offers a tax and rebate program for those who qualify. Homeowners may earn tax credits and rebates that are itemized on their end-of-year tax returns for purchases made throughout the tax year, or they can receive an instant rebate when making purchases on select items. While the credits and rebates provide monetary incentives to make smarter and cleaner energy choices, the programs ultimately help reduce environmental greenhouse gasses and the global carbon footprint. Federal, state, and local programs offer tax credits and rebate incentives for homeowners who make qualifying purchases.
Tax credits and rebates are part of the American Recovery and Reinvestment Act that is continually undergoing changes, so it is important to thoroughly check current federal rules and regulations regarding what tax credits are available for your present situation. While there are state programs that offer rebates and incentives, many choose to claim energy-related rebates and credits when filing their taxes. It is always best to check directly with the IRS or a certified public accountant to ensure that your purchases or home additions qualify. Most tax credits and rebates were initiated or extended through the American Taxpayer Relief Act of 2012, but it is important to understand that the laws that govern taxpayer relief, credits, and rebates are continually changing. Always check with the IRS or Energy.gov to see what benefits are currently available.
The American Taxpayer Relief Act of 2012 opened the doorway for many citizens to take credits and rebates for energy-efficient upgrades to homes including the purchase of approved appliances such as air conditioners, water systems, heating and cooling appliances and systems, lighting choices and more. There are programs that offer rebates for choosing alternative energy sources, such as solar, wind turbines, or fuel cell, or changing a home’s structure by replacing energy-consuming systems with more efficient options. Most appliances must bear the Energy Star seal in order to qualify for rebates. On a state or local level, many consumers will find instant rebates on select purchases while other consumers might wait until the end of the year to claim their purchases or home enhancements on their tax returns.
Those who want to apply for tax rebates and credits or learn more about a program before making a purchase will find a great deal of information at the IRS and Energy.gov websites. The Database of State Incentives for Renewables and Efficiency is an invaluable resource, as it lists federal and state programs and classifies them by incentive types, what type of energy-efficient technology is applicable, whether the incentive is for residential or commercial structures, and when the purchase or addition needed to be made in order to qualify. Those who purchased or made energy-efficient home additions before the current tax year should speak with their accountant, as they may be able to claim the deduction if they haven’t already done so. When claiming past deductions, the consumer is often limited to a lump-sum deduction. Make sure to keep receipts for all additions made to the home as well as energy-efficient purchases. Energy tax credits and rebates are an important tool that helps drive consumers to making wise choices and rewards them for doing so. As energy efficiency not only helps the environment but also provides a less-expensive alternative for homeowners in the long run, many who make the switch find their yearly utility bills are less than they were previously. Choosing energy-efficient appliances and home additions offers many benefits and rewards that are not limited to tax credits and rebates.
- Energy Star Rebate Finder
- Energy Saver
- IRS Energy Saving Rebates
- Energy-Efficient Mortgage Homeowner Guide
- Residential Energy Tax Credits: Overview and Analysis (PDF)
- Energy Efficiency Incentives
- Energy Efficiency Tips
- Consumer Resources from the American Council for an Energy-Efficient Economy
- Resources from the American Council on Renewable Energy
- Citizens’ Guides from the Federal Energy Regulatory Commission
- Tips for Energy Efficiency
- Green Energy Tips
- Tax Credits Extend Home Energy Conservation Savings
- Money-Saving Energy-Efficiency Tips
- Water Sense Rebate Finder for EPA
- Home Energy Rating System (HERS)
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