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Don't Forget to Claim the Energy Credit on Your Taxes

Editor's Note: This article is part of our 2014 Tax Tips series. Robert Flach is an expert with more than 40 years of experience as a tax professional and also blogs as The Wandering Tax Pro.

NEW YORK (MainStreet) — The American Taxpayer Relief Act of 2012 extended the lifetime $500 "Nonbusiness Energy Property Credit" for qualified energy efficiency improvements or residential energy property costs for your primary principal residence for two years. So you can still claim a tax credit for a qualified energy-efficient purchases made in 2013.

The credit, reported on Page 2 of IRS Form 5695 is 10% of the cost, up to a maximum of $500. Some items are limited to a credit of from $50 to $300. The qualifying purchase must be for an existing home that is your principal residence.

If you claimed at least $500 in energy tax credits on your 2006 through 2012 returns, you are not eligible for a credit for 2013. If you claimed $300 in energy credits over the years, the most you can claim in 2013 is $200.

The credit is available for -

  • Biomass Stoves
  • Heating Ventilating, Air Conditioning (Advanced Main Air Circulating Fan, Air Source Heat Pumps, Central Air Conditioning, Gas, Propane, or Oil Hot Water Boiler, and Natural Gas, Propane or Oil Furnace)
  • Insulation
  • Roofs (Metal and Asphalt)
  • Water Heaters (Gas, Propane or Oil Water Heater, and Electric Heat Pump Water Heater)
  • Windows and Doors

Not every new window, door, boiler, heater, or furnace will qualify. There are very specific "energy efficiency" requirements for each of the qualifying items. You can go to the Energy Star website to find out what the specific qualifications are for individual items.

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