By Shaun Bestby
Homeowners can save up to $500 with the Tax Incentives Assistance Project (TIAP). TIAP is a public interest collaboration that gives homeowners access to tax incentives for upgrading their home appliances and heating and cooling equipment to meet energy-efficiency standards.
Time is running out. Residential tax incentives for both existing home credits and new home credits are slated to expire at the end of 2013. Here's what you need to know:
Consumers can check with retail suppliers, installation professionals or manufacturers for more details about the brands and specific models included in the incentive program. Currently, the following upgrades are eligible for incentives.
- Furnaces – gas, propane and oil
- Biomass stoves – stoves that run on pellets, corn or wood chips
- Geothermal heat pumps
- Central air conditioning systems and air source heat pumps
- Water heaters
- Fans for both heating and cooling systems
In addition to appliance upgrades, incentives provide tax relief for upgrading building envelope materials, which include items such as windows, exterior doors and roofing materials that have cooling components built in to reduce energy consumption for heating and cooling interior space.
Rental property is not eligible for TIAP credits. The purchaser must occupy the residence where equipment is scheduled to be installed. For new purchases, equipment must be installed after move-in is complete.
Tax credits up to $2,000 are available for builders that install energy-efficient appliances and incorporate building materials that significantly reduce energy use and/or meet Environmental Protection Agency guidelines under the Energy Star Homes programs.
Documenting Equipment Purchases
Each piece of equipment must be certified as an energy-efficient product, and that certification should be kept on file with the tax return for the year the credit is claimed. Taxpayers are not required to provide a copy of the certification with the IRS form 5695 to claim the credits. However, in the event of an audit, it must be available for review.
One way homeowners and renters can save money on electric bills is to compare energy suppliers, according to energysavings.com. Prices vary by almost 10 percent in some communities, depending on the state of residence and the length of contract. Comparing rates for a variety of suppliers enables consumers to choose the lowest rates and explore which companies have the best policies for the environment, too.
Additional Tax Incentives
There are numerous tax incentives and credits available for vehicles with sustainable features and ratings. Renewable energy, fuel cells and electric vehicle tax credits are also at the top of energy-efficient credits available for individuals and business owners.
The Residential Energy Efficient Property Credit has some appealing features for most homeowners. The credit does not expire, and it covers up to 30 percent of the equipment's purchase price. Eligible appliances include solar electric equipment, solar water heaters and wind turbines.
One advantage for this particular credit is that amounts in excess of the tax liability can be claimed the next year. This credit is available until 2016, and non-primary residences are eligible for the credits.
Shaun is an environmental consultant, having previously worked in government environment agencies.