Fiscal deal includes tax credits for energy-efficient upgrades
In addition to holding down taxes for all but the wealthiest Americans, the fiscal package passed this week includes a number of incentives for homeowners to become more energy efficient. Buried in the 150-page document that is the American Taxpayer Relief Act are tax credit extensions for energy-efficient appliances, building materials, and more.
The rules are pretty complicated, as you might expect, but here's what you need to know: You can save up to $500 on taxes if you made energy-efficient upgrades to your home in 2012, or plan to do so in 2013. These might include swapping out your old furnace with a new high-efficiency model, laying insulation in the attic, or putting in new windows. To collect, you'll need to file IRS form 5695 with your 2012 or 2013 taxes. Be sure to keep a copy of the Manufacturer's Certification Statement and any receipts or itemized bills.
Before you start gathering receipts, keep in mind that the $500 tax credit cap applies back to the beginning of the program so taxpayers who claimed the credit in previous years will not be eligible for more money this time around. On its website, the Internal Revenue Service says it will be providing updated guidance in the coming weeks so taxpayers can begin filing their 2012 returns.
The fiscal deal also extends tax credits to green businesses, including manufacturers of energy-efficient appliances and producers of wind turbines and other forms of alternative energy.
To find energy-efficient products, check our buying guides for windows, appliances and water heaters.
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