Walter & Shuffain, P.C.
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The American Recovery and Reinvestment Tax Act of 2009 contains important provisions in many areas for individuals. One specific area that is addressed by the legislation is residential energy credits.
The high cost of energy is encouraging many people to make energy efficient improvements their homes. In 2008, energy credits for residential energy improvements were not available. However, in 2009, Congress once again put in place credits for qualified energy efficient improvements or expenditures made to a taxpayer's principal residence, including new insulation; replacement windows, skylights and doors; central air conditioners; certain water heaters, furnaces or boilers; and a new metal or asphalt roof specifically treated to reduce heat loss.
Some of the changes are highlighted below:
CNEP Credit - Several years ago, Congress created a credit for non-business energy property (CNEP) for the installation of energy efficient doors and windows, water heaters and similar items. The nonrefundable lifetime credit was capped at $500 and expired in 2007. However, the American Recovery and Reinvestment Act of 2009 reinstates the CNEP for 2009 and 2010, and eliminates the lifetime cap of $500. In addition, it also increases the credit from 10 percent to 30 percent of qualified expenses and increases the maximum CNEP amount for 2009 and 2010 installations to $1,500.
Residential Energy Efficient Property (REEP) Credit - The REEP credit is allowed for qualified expenditures that produce energy for home use, such as for solar energy and fuel cell energy applies not only to your principal residence, but also to your vacation home. Although the maximum credit for qualified fuel cell property remains unchanged ($500 for each half kilowatt of capacity), the American Recovery and Reinvestment Tax Act of 2009 removes the maximum credit amounts for the following qualified property expenditures for tax years beginning after December 31, 2008:
If you would like more detailed information, please do not hesitate to contact us.