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Home » Eco-Friendly Savings, Taxes

2012 Energy Tax Credits Reduced

Last updated by on 18 Comments

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
  • Roofs
  • Water heaters
  • Insulation
  • 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

2012 energy tax creditWhat 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.

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18 Comments »
  • cdg says:

    “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.”

    They’re gone because they were useless giveaways for rich people to install useless device, not because we’ve “recovered”. In fact, the recession is far worse in terms of real unemployment.

    • tb says:

      I disagree that “they were useless giveaways for rich people to install useless device”. I’m typical middle class, looking to replace my windows this year. I would have greatly enjoyed the $1500 tax credit if it didn’t expire. I can’t imagine that only rich people can afford to replace lower-end vinyl windows.

    • aw says:

      recovered was in quotes (as in “recovered”) because the author was being tongue-in-cheek.

  • cp says:

    Defintely now useless. I got $1500 off of my federal taxes and an additional rebate from the state of Virginia. THANK YOU Barack

    • Fatty Matty says:

      Did Obama write a check to you for your tax credit? Of course he didn’t. He stole it from future generations by borrowing it from them so you could have a benefit that you ignorantly thank him for. Your windows were paid for partially by my kids and grandkids. You got what you wanted though. Who cares about future generations you friggin’ thief.

  • Gary says:

    cp, you need to thank Bush, these energy tax credits were started by his leadership. Barack only reduced them…

    • hr says:

      Bush was the greatest leader this world has ever known. No one should have ever questioned him, especially during war time.

    • devin says:

      While there were some energy credits that began under the Bush administration (after the Democrats took control of Congress, I think), the specific energy credits discussed here were part of the American Recovery and Reinvestment Act. ARRA was signed into law during Obama’s first month in office. ARRA increased numerous credits that had existed in 2007 (and expired in 2008) from 10% to 30%, and expanded several completely new credits.

      You can credit/blame Bush for a lot of things, but ARRA isn’t one of them.

    • Mary says:

      You are wrong, it is not the President, it is the inept Congress that is responsible for the spending bill….whether you agree with the premise that these breaks would help stimulate the economy or not is a mute point. You can have a Bush, a Obama or a Clinton in power as exec but if Congress is not willing to work together, you will get garbage. You will have the same thing even if Mitt gets in….Congress and their lack of experience in compromise is evident, the leaders are inept on both sides of the party, they are more interested in the party’s well being than the country…just my opinion.

      • autum says:

        So true. The president is just a representative for congress, the controller of laws and finance. I’m no expert or a college graduate and even I can tell.

        • Joe Gideon says:

          Seriously,
          you people (i.e. The Pretender’s supporters) should read more:

          Within the executive branch itself, the President has broad powers to manage national affairs and the workings of the federal government. The President can issue rules, regulations, and instructions called EXECUTIVE ORDERS, which have the binding force of law upon federal agencies but DO NOT require congressional approval.

          According to the Budget and Accounting Act of 1921, the president is also responsible for preparing the Budget of the United States, although the Congress must approve it.

          The only problem with Bush was that he TRIED to be bi-partisan, and the DEMS tucked it to him each and every time, unlike the strawman in the WH now; he lies bold and bare-faced to the electorate, but rarely hides his disdain for the opposition party.
          BTW-because of GWB-YOU are alive today! You’re welcome.

  • susan says:

    can someone help me? To clarify, is there a tax credit available for home insulation for 2012? I am finding conflicting info on the web. If you have a reliable site, can you mention it in your reply? Thank you.

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