Thursday, February 10, 2011


Q. Are there any new rules on the purchase of energy saving items for my home?

A. The rules are stricter. You can claim a tax credit for energy saving home improvements you make this year, but the rules for 2011 are crazy.

• You can only claim a 10% credit for qualified energy property placed in service in 2011 up to a $500 lifetime limit (with no more than $200 from windows and skylights).

That’s not all…
• The credit you claim for any year can't exceed $500 less the total of the credits you claimed for 2006 through 2010.
• The amount you claim for windows and skylights in a year can't exceed $200 less the total of the credits you claimed for these items in 2006 through 2010.
• The credit is equal to the sum of: (1) 10% of the amount you pay for qualified energy efficient improvements (such as insulation, exterior windows or doors that meet certain energy efficient standards) installed during the year; and (2) the amount of the residential energy property expenses you paid during the year.

But that’s not all…
• There is a limit on the amount of “residential energy property expenses.”
• The credit for residential energy property expenses can't exceed: (A) $50 for an advanced main circulating fan; (B) $150 for any qualified natural gas, propane, or hot water boiler; and (C) $300 for any item of energy efficient property (advanced types of energy saving equipment, such as electric heat pumps, meeting specific energy efficient standards).

Final step: Then you divide the resulting number by your grandmothers age times you license plate.

Hey, just kidding about that final step. Who says accountants can’t make a joke.

Larry Kopsa CPA