Energy-Efficiency Tax Incentives for 2010

For 2009, under the Nonbusiness Energy Property Credit, you may be able to claim a credit of 30 poercent of the costs of qualified energy-efficient property or improvements (residential energy property credit) and a 30 percent credit for solar energy and fuel-cell power plants (residential alternative energy credit). The credit, which was not available in 2008, has been reinstated and is available in 2009 and 2010.
Improvements include insulated walls or ceilings; energy-efficient exterior doors and windows, including skylights; specially treated metal roofs; and a high-efficiency furnace, air conditioner or water heater. The improvements must have been made in your principal residence located in the United States and the maximum credit is $1,500.

For 2009, under the Residential Energy Efficient Property Credit, there is no limitation on the credit amount for qualified solar electric property costs, qualified solar water-heating property costs, qualified small-wind energy property costs and qualified geothermal heat-pump property costs. The limitation on the credit amount for qualified fuel-cell property costs remains the same.

Also, the Alternative Motor Vehicle Credit grants four separate credits for different types of energy-efficient vehicles. Your potential credit will be determined by the type of vehicle and which of the four credits apply. You can check with your CPA or the IRS for a list of qualified vehicles and allowable credits.

One credit that is part of the Alternative Motor Vehicle Credit is the credit of up to $3,400 for hybrid vehicles. The credit is taken in the year you purchased the vehicle. However, the full credit only applies to the first 60,000 vehicles that the auto manufacturer sells. After that, the credit is phased-out. Ford has reached the limit, and no credit is available for any Ford or Mercury hybrid motor vehicle purchased after March 31, 2010. Honda has reached the limit, and no credit is available for any Honda hybrid motor vehicle purchased after December 31, 2008. Toyota has reached the limit, and no credit is available for any Toyota hybrid motor vehicle purchased after September 30, 2007. The credit is available for other automobile manufacturers.

For qualified vehicles purchased in 2009, a plug-in electric drive motor vehicle credit is also available. A similar credit is also available for vehicles placed in service in 2010. For 2009, the credit is equal to $2,500 plus $417 for each kilowatt hour of traction battery capacity in excess of four kilowatt hours. The credit is capped at $7,500 for a vehicle with a gross weight of 10,000 pounds or less. The credit begins to phase out when the total number of qualified vehicles sold reaches 250,000.

Content provided by the Massachusetts Society of Certified Public Accountants and the American Institute of Certified Public Accountants.