The expiration at the end of this month of federal energy tax credits enabled by economic stimulus packages in 2008 and 2009 won’t impact builders of new homes very much, chiefly because the qualifying products and systems being eased out were limited to homeowners who made upgrades and improvements to existing homes.
In fact, the expiration of those tax credits may shine more light on the ones that remain, which apply to both existing and newly built homes through 2016, specifically for solar energy systems, geothermal heating and cooling systems, small wind turbines, and fuel cells.
Not only are tax credits still available to homeowners and buyers who make those investments, but the $1,500 cap on the expiring credits does not apply. Consumers may claim a tax credit on IRS Form 5629 for 30 percent of the cost, including labor, to install qualified systems that are operational by Dec. 31, 2016, regardless of how much they spend. (Rules for fuel cells are a little different.)
A qualified $20,000 rooftop solar array, then, would net a home buyer $6,000 in a one-time federal tax credit taken directly off of their income tax burden—a far more impactful incentive than a simple deduction off of their taxable income.
For more information, go to www.energystar.gov/index.cfm?c=tax_credits.tx_index or consult a professional tax advisor.