There are two tax credits offered to property owners that complete energy improvements. Credits reduce the tax owed and will, therefore, be beneficial. This article provides energy tax credit overview for Massachusetts property owners.
Two Different Tax Credits
The Wind, Solar, Geothermal and Fuel Cell Tax Credit
This tax credit can be used for pre-existing properties and newly built ones, if utilized as a principal home. Investment real estate do not qualify. People can receive a credit equaling 30% of the cost of repairs made between January 1st and December 31st.
The repairs in this list qualify under this category:
- Geothermal Heat Pumps
- Solar Panels
- Solar Water Heaters
- Wind Powered Energy Systems
- Fuel Cells (up to $500 for every 0.5 kilowatt capacity – other limits apply)
Energy Efficient Upgrades
This credit applies to building materials, insulation, windows, skylights, doors, roofs, air circulating fans, furnaces, and hot water boilers. Particular restrictions apply, so check the tax laws prior to using the credit. There are dollar limits on certain items as well. Only repairs to principle residences qualify and all products must come with a minimum 5 year life expectancy. Generally, homeowners may take a credit of 10% of the purchase price up to $500. Once a filer reaches the five hundred dollar limit, no additional amount can be taken in any future year. This is an overall limit and not a tax-year one.
Energy Tax Credit Overview For Massachusetts Property Owners
With all tax items, keep receipts to document expenses. Also keep the product info. of all items as some have specific criteria under the tax laws. If you are worried about whether your purchases qualify for this credit or have a lot of credits in your tax return, look into consulting with a tax preparer. Additional Energy Tax Credit Overview For Massachusetts Property Owners is offered at the Energy Star website. The details in this blog are meant only as an overview and is subject to change subsequent to the publishing of this blog.