2009 Green Tax Credits

Many taxpayers are asking Roni Deutch Tax Centers across the country about the available "green" tax credits for individuals and their requirements for the 2009 tax season. Two available credits striking a lot of interest are an electric motor-vehicle and the home energy-saving equipment credit.

Electric Motor-Vehicle Credit

The Internal Revenue Code Section 30 (IRC 30) provides a credit for qualified plug-in electric vehicles. The credit is equal to 10 percent of the cost of a qualified plug-in electric vehicle and is limited to $2,500. Qualified vehicles may include low-speed vehicles or vehicles that have two or three wheels.

One requirement is the vehicle must be acquired after February 17, 2009, and before January 1, 2012 to qualify. The vehicle must be acquired for use or lease and not for resale. Additionally, the original use of the vehicle must be with the taxpayer and the electric vehicle must be used predominantly in the United States.

Home Energy Saving Equipment Credit

The American Recovery and Reinvestment Act (Recovery Act), enacted earlier this year, expanded two home energy tax credits: (1) the non-business energy property credit and (2) the residential energy efficient property credit.

1. The non-business energy property credit equals 30 percent of what a homeowner spent on eligible energy-saving improvements, up to a maximum tax credit of $1,500 for the combined 2009 and 2010 tax years. This includes the cost of certain high-efficiency heating and air conditioning systems, water heaters and stoves that burn biomass, along with the labor costs for installing these items. In addition, the cost of energy-efficient windows and skylights, energy-efficient doors, qualifying insulation and certain roofs also qualify for the credit (though the cost of installing these items does not count).

This means that if you spent as little as $5,000 before the end 2009 on eligible energy-saving improvements, you can save as much as $1,500 on your 2009 federal income tax return. Of course, due to limits based on tax liability and other credits claimed by a particular taxpayer (as well as other miscellaneous factors), actual tax savings can vary. These tax savings are on top of any energy savings that may have resulted by making the energy-saving improvements.

2. Homeowners going green should also check out a second tax credit designed to spur investment in alternative energy equipment. The residential energy efficient property credit equals 30 percent of what a homeowner spends on qualifying property, such as, solar electric systems, solar hot water heaters, geothermal heat pumps, wind turbines, and fuel cell property. Generally, labor costs are included when calculating this credit. Also, no cap exists on the amount of credit available except in the case of fuel cell property.

Not all energy-efficient improvements qualify for these tax credits. For that reason, homeowners should check the manufacturer's tax credit certification statement before purchasing or installing any of these improvements. The certification statement can usually be found on the manufacturer's website or with the product packaging. Normally, a homeowner can rely on this certification. The IRS cautions that the manufacturer's certification is different from the Department of Energy's Energy Star label, and not all Energy Star labeled products qualify for the tax credits.

The Tax Lady Roni Deutch and her law firm Roni Deutch, A Professional Tax Corporation have been helping taxpayers across the nation find IRS tax relief for over seventeen years. The firm has experienced tax lawyers who can fight IRS tax liens on your behalf.