Saturday, September 19, 2009
Live Green with ARRA Tax Breaks
Live greener and enhance your cash flow.
The recent passage of The American Recovery and Reinvestment Act of 2009 (ARRA) opens the door to tax savings for energy efficient home improvements, commercial renewable energy development, and many other green choices.
For homeowners, the new law increases the credit rate to 30 percent of the cost of all qualifying improvements and raises the maximum credit limit to $1,500 for improvements placed in service in 2009 and 2010. Examples of improvements include insulation; heating or cooling systems; roofs (metal and asphalt); and energy efficient exterior windows, doors or skylights.
Qualifying standards for energy efficiency are increasing, so stay tuned. In the meantime, homeowners may continue to rely on Energy Star labels for exterior openings in determining whether product purchased before June 1, 2009 qualifies for the credit.
Renewable energy improvements also are funded with the residential energy efficiency property credit as the previously imposed maximum amounts are removed. This allows for a credit equal to 30 percent of the cost of qualified improvement. Residential installations of solar water heaters, geothermal heat pumps and small wind turbines all qualify.
Businesses and new developments can benefit substantially with tax credits and grants for renewable energy investments. ARRA also supports greener transportation options with income exclusions for employer-provided benefits for transit and parking, and tax credits for purchase of or conversion to plug-in electric vehicles.
Click on the links above for details on the IRS website.