Did the fiscal cliff law extend the tax credits for
energy-efficient home improvements for 2013?
SEE ALSO: The Most-Overlooked Tax Deductions
Yes it did. The law, which Congress passed on New Year's Day,
revived the tax credit for both 2012 and 2013. If you made any
eligible improvements in 2012 -- after the credit expired -- dig up
the receipts before you file your taxes for the year because you
may get a tax break after all. And keep these rules in mind when
planning home improvements for 2013:
You can receive up to $500 in total tax credits for eligible
home improvements you've made since 2006 (including a $200 limit
for windows). If you claimed the full credit for home improvements
since then, you won't be able to take the break again.
If you are eligible, the tax break applies to 10% of the
purchase price (not installation costs) of certain insulation
materials, energy-efficient windows, external doors and skylights,
and metal roofs with pigmented coating or asphalt roofs with
cooling granules that meet Energy Star requirements (see the
Environmental Protection Agency's Energy Star Web site for
details). You can count both materials and labor costs for certain
central air conditioners, biomass stoves, electric heat pumps or
electric heat pump water heaters that meet specific
energy-efficient guidelines -- up to a maximum of $300 for each.
You can count up to $150 for an eligible natural gas, propane or
oil furnace or hot water boiler.
The items must meet specific energy-efficient requirements to
qualify. See the Alliance to Save Energy tax credit page and the
Tax Incentives Assistance Project for details. Keep your receipts
and manufacturer's certification of eligibility.
Some alternative-energy improvements qualify for larger tax
credits. For improvements made by December 31, 2016, you can take a
credit worth 30% of the cost of buying and installing certain
alternative energy equipment, such as geothermal heat pumps, solar
water heaters, solar panels, fuel cells and small wind-energy
For more information about these tax breaks, see IRS Form 5695
Residential Energy Credits.
If you don't qualify for the federal incentives, see if you can
get any state breaks. For links to details about programs in each
state, see the American Council for an Energy-Efficient Economy
site. For a list of several state and utility programs, see the Tax
Incentives Assistance Project.