As we become more environmentally conscious, there are several tax benefits to going green.  Some of these incentives are outlined below.

Nonbusiness Energy Property Credit: After expiring in 2007, the nonbusiness energy property credit was re-enacted for 2009 and 2010 only. Property qualifying for the credit includes windows (including skylights), exterior doors, insulation, metal roof, advanced main air circulating fans, natural gas, propane, or oil furnace or hot water boilers, and other energy efficient building property that meets certain energy standards. The credit is 30% of the cost of the improvement(s) up to a maximum credit per year of $1,500.

Residential Energy Efficient Property Credit: Tax incentives are available to taxpayers who install certain energy efficient property, such as photovoltaic, solar water heating, fuel cell property, small wind energy property and geothermal heat pumps. In 2009, a credit is available for the expenditures incurred for such property up to a specific dollar limitation, except that the cap is removed for all property except fuel cell property, so 2009 may be a better time to purchase and install such equipment. The property purchased cannot be used to heat swimming pools or hot tubs.

Alternative Motor Vehicle Credit: For 2009, a credit is available for purchases of motor vehicles powered by certain alternative fuels. The dollar amount of the credit depends on fuel savings and weight of the vehicle. The most popular vehicles subject to the credit are hybrids. However, when a particular manufacturer sells in the United States its 60,000th of the particular hybrid, a phaseout period kicks in. The phaseout will reduce the credit from fully available to nothing being available. Due to this limitation, many popular hybrids have been phased out from the credit. Credits are also available for lean-burn technology vehicles (subject to the same phaseout), qualified fuel cell motor vehicles, qualified alternative fuel motor vehicles, and qualified plug-in electric-drive motor vehicles.

If you have any questions regarding these credits please contact one of our tax professionals.