2012 Energy Tax Credits Reduced
Update: the 2011 energy tax credits were extended in to 2012 and 2013 as part of the Fiscal Cliff deal.
2012 Energy Tax Credit Updates
If you were planning a modest home improvement update that would save you future energy costs and reduce your carbon footprint in the hopes that it would be partially funded by a home energy tax credit from the IRS, you may be disappointed in 2012.
There still are energy tax credits in 2012 and 2013, but they have been significantly reduced. With the 2011 energy tax credit, you could claim a 10% tax credit on some very common money-saving home updates, which included:
- HVAC: Air conditioning (AC) and furnaces
- Windows and doors
- Water heaters
- Biomass stoves
Unfortunately, all of these tax credits disappear in 2012 – probably due to the inability to Congress to agree on any sort of spending plan. It wasn’t long ago (2009-2010) that the American Recovery and Reinvestment Act offered up fantastic 30% tax credits up to $1,500. Now that we have “recovered”, that is gone.
30% Energy Tax Credits in 2012
What you are left with for energy tax credits in 2012 are fairly generous 30% tax credits on huge energy installation projects that are geared towards environmental die-hards:
- geothermal heat pumps (no upper limit, both principal residences & second homes apply)
- solar energy systems (no upper limit, both principal residences & second homes apply)
- small wind turbines (no upper limit, both principal residences & second homes apply)
- fuel cells (up to $500 per .5 kW of power capacity. Principal residences only)
For more info, check out the Energy Star Energy Tax Credit site.