Tax Credit for Energy-Efficient Home Improvements Reinstated, Extended
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The fiscal cliff deal brought back some useful tax credits
Homeowners can usually benefit from a number of tax deductions (reducing their taxable income) as well as tax credits (dollar-for-dollar reductions in their tax bill). Although the tax credits have been on the slim side lately, there’s a bit of good news tucked into the fiscal cliff deal (“H.R. 8″) that the U.S. Congress reached on January 1, 2013.
Congress reinstated and extended through 2013 a 10% tax credit (under Section 25C of the Tax Code) that homeowners can claim based on having spent money making energy-efficient improvements to their existing (as opposed to newly built) homes.
You’ll need to read the fine print regarding what types of items the credit applies to and how much of a credit you’ll be allowed to claim. In general, the credit covers such home features as windows, doors, skylights, fans, insulation, furnaces, and hot water heaters. Per-item limits also apply, and there's a $500 overall limit for use of this credit.