Tax Credits for Going Green: Do You Know Them All?

If you went green in 2013, your timing couldn’t be better.  The US government’s focus on helping the environment through tax credits and deductions was still in force for 2013, and IRS form 5695 is the form to use to claim those tax breaks.  How does it work?  Good question, since there are a lot of rules involved here.  Here’s the basic idea:

First, Find Out if Your Home Qualifies

If the home you greened was your primary residence in which you live all year round, then no problem, it qualifies.  It can take any shape: condo, farmhouse, trailer and even a houseboat.  As long as you lived there most of the time you’re good so far.

Your home under construction counts for some of the energy credits claimed on IRS form 5695.  Likewise, only some of the energy credits are available for homes that are under construction.  There are different types of credits for different types of home improvements.  That takes us to the next step:

Find Out if Your Home Improvements Qualify

For things like a solar energy system, it’s called the Residential Energy Efficient Property Credit Part 1).  For things like a energy-efficient water heater or energy efficient windows, it’s called Nonbusiness Energy Property Credit (Part 2).  

Main homes and homes under construction qualify for the improvements made under Part 1.  Part 2 is just for existing homes.

The government runs the Energy Star Program.  This tells consumers all about the energy efficiency of home items from irons to energy efficient roofing materials to your washing machine.  If your purchase had an energy star ticket on it when you bought it, then you can look it up on their website and find out about it’s qualifications on IRS form 5695.   They have a page that’s just for the 2012 and 2013 Federal tax credit for energy efficient home improvements.f5695

 

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