Editor's Note: This article is part of our >2013 Tax Tips series. Robert Flach is an expert with almost 40 years of experience as a tax professional and also blogs as The Wandering Tax Pro.
NEW YORK (MainStreet)You can claim a tax credit for a qualified energy-efficient purchase made this year on your 2013 Form 1040.
The American Taxpayer Relief Act of 2012 extended the lifetime $500 "Nonbusiness Energy Property Credit" for qualified energy efficiency improvements or residential energy property costs for your primary principal residence through 2013.
Also see: 6 Simple Ways to Lower Your Energy Costs This Summer>>
The credit is 10% of the cost, up to a maximum of $500. Some items are limited to a credit of from $50 to $300. The qualifying purchase must be for an existing home that is your principal residence.
As I stated above, the $500 is a "lifetime" limit. If you claimed at least $500 in energy tax credits on your 2006 through 2012 returns, you are not eligible for a credit for 2013. If you claimed $300 in energy credits over the years, the most you can take in 2013 is $200.
The credit is available for -
- Biomass Stoves
- Heating Ventilating, Air Conditioning (Advanced Main Air Circulating Fan, Air Source Heat Pumps, Central Air Conditioning, Gas, Propane, or Oil Hot Water Boiler, and Natural Gas, Propane or Oil Furnace)
- Roofs (Metal and Asphalt)
- Water Heaters (Gas, Propane or Oil Water Heater, and Electric Heat Pump Water Heater)
- Windows and Doors
Not every new window, door, boiler, heater or furnace you buy in 2013 will qualify. There are very specific "energy efficiency" requirements for each of the qualifying items.
For example, to qualify for the credit an advanced main air circulating fan - a fan, or blower motor which blows the air that your furnace heats up through the duct system - must use no more than 2% of the furnace's total energy. The maximum credit allowed for an advanced main air circulating fan is $50, regardless of the cost.
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Only "split system" air source heat pumps with a Heating Seasonal Performance Factor (HSPF) greater than or equal to 8.5, Energy Efficiency Ratio (EER) greater than or equal to 12.5, and Seasonal Energy Efficiency Ratio (SEER) greater than or equal to 15 qualify for the credit. For a "package system" the requirements are HSPF greater than or equal to 8, EER greater than or equal to 12, and SEER greater than or equal to 14.
And a gas, oil, propane water heater must have an Energy Factor greater than or equal to 0.82 or a thermal efficiency of at least 90% if you want a tax credit.
You can go to the Energy Star website to find out what the specific qualifications are for individual items.
You should be aware of the specific requirements before you make your purchase. And ssk the salesman for a Manufacturer's Certification Statement - a signed statement from the manufacturer certifying that the product or component qualifies for the tax credit.
Also see: IRS Issues New Home-Office Deduction>>
If you have already purchased an item you thought would qualify for the credit, you should verify that it actually does before you give your "stuff" to your tax professional next year. Don't just include a copy of the bill for a purchase or a note that you spent $800 for a new hot water heater and expect your taxpro to waste his or her valuable time attempting to determine if the purchase qualifies for the credit.