Did you make energy efficient home improvements in your home during 2010 or purchase an energy efficient vehicle? If you did, do you know that you may qualify for a credit on your 2010 income tax return. If you purchased and installed certain energy efficient items in your home last year or bought a hybrid vehicle you will want to read on to help determine if you qualify for an energy efficient credit on your tax return.
According to the IRS website there are a total of six different energy related tax credits available to tax payers through the American Recovery and Reinvestment Act of 2009, with two of the credits being for energy efficient improvements related to your home and the remainder for energy efficient vehicles. Here is a detailed look at each credit that is available.
Residential Property Credit for Energy Efficiency
If you purchased and installed any residential alternative energy equipment you may qualify for this credit. Items that qualify are solar powered hot water heaters or solar powered electricity units as well as wind turbines. In order to qualify the equipment must be installed on your home or in connection with the main home on your property. If your purchase qualifies your credit will be 30% of the amount paid.
Property Credit for Residential Energy
This credit is available to homeowners who during 2009 and/or 2010 made energy efficient changes to their home. Items that qualify for the credit include things like energy efficient furnaces and central air conditioners as well as energy efficient exterior windows and doors, insulation and more. The total credit allowed is 30% of the cost with a maximum credit of $1,500.00. It is important to note that the total credit is $1,500.00 for both tax years 2009 and 2010, meaning if you claimed the full amount on your tax return in 2009 you will not be able to claim an additional credit this year.
Electric Conversion Plug In Kit Credit
If you purchased a conversion kit for your vehicle last year you may be entitled to a credit. The kit must have been purchased to convert your vehicle to a qualifying plug in electric drive motor vehicle. Additionally, to receive the credit the vehicle must have been placed into service sometime after February 17, 2009. The total credit you will receive for such conversion is 10% of the cost with a maximum credit allowed totaling $4,000.00.
The Electric Drive Plug-In Vehicle Credit
This credit has been changed slightly from previous years. The total credit you can receive is based on the battery capacity of your vehicle and ranges in dollars between $2,500.00 and $7,500.00. This credit is predicted to be available through 2014; however, once 200,000 of such vehicles have been sold by a particular manufacturer, the credit will start to phase out.
The Electric Plug-In Vehicle Credit
Another vehicle credit you may qualify for is available for two different types of electric vehicles. This credit can be claimed for certain three wheel vehicles as well as some electric slow speed vehicles. If your vehicle purchase qualifies you will be able to receive a credit totaling 10% of your purchase with a maximum credit allowed totaling $2,500.00.
Changes That Now Allow for Alternative Vehicle Credits Against the AMT
In past years motor vehicle credits had been reduced or erased for some tax payers including those who owed the Alternative Minimum Tax (AMT). Today, however, if you qualify for an alternative vehicle credit, you will be able to apply it against your AMT.