Tax Incentives
State and Federal tax treatment is available for energy users to help lowering the total cost of equipment used to reduce your energy costs.
The Energy Policy Act of 2005 (EPAct) created tax deductions and credits for the installations of many energy efficiency measures. These deductions and credits are applicable to both business and residential homeowners under different sets of guidelines. Homeowners can receive credits for a percentage of the cost of specific eligible measures installed. Commercial property owners can earn a tax deduction for improvements relative to ASHRAE 90.1-2004 baseline standards. These deductions fall into three areas of concentration: Interior lighting; heating, cooling ventilation and hot water systems; and building envelope. Consult a tax specialist for specific information.
Standard investment tax credits for business. This credit can be used deducted against capital improvement expenses. These expenses generally include rehabilitation expenses and specifically include solar energy systems, geothermal energy systems, and micro turbines. See form instructions for form 3468 .Investment Credit. for more information. Consult a tax specialist for specific information.
This is a corporate tax credit in which the Energy policy Act of 2005 (EPAct), Section 1301, extended the Renewable Electricity Production Credit (REPC) through 12/31/07. This is a per kWh tax credit for electricity generated by qualified energy resources. Resources included are: wind energy, geothermal energy, closed and open-loop biomass, poultry-waste energy, solar energy, small irrigation power, landfill gas, municipal solid waste combustion and refined coal. Consult a tax specialist for specific information.
This is a standard business deduction which allows you to recover your cost in business or income-producing property through yearly tax deductions. You do this by depreciating your property, that is, by deducting some of your cost on your tax return each year. You can depreciate both tangible property, such as a car, building, or machinery, and certain intangible property, such as a copyright or a patent. This deduction can apply to energy efficiency equipment as well. Consult a tax specialist for specific information.
This is a specific tax incentive designed to assist the U.S. Environmental Protection Agency (EPA) to clean up and revitalize former industrial or commercial areas that were abandoned due to concerns about environmental contamination. EPA and its federal partners believe that, with the right incentives, these former engines of industrial growth can once again generate value for both the private and public sectors. These areas are "brownfields," which EPA defines as "abandoned, idled, or under-used industrial and commercial facilities where expansion or redevelopment is complicated by real or perceived contamination." These properties may be large or small; urban or rural; former factories or warehouses. They have all been left idle due to concerns about cleanup costs and legal liabilities. Old industrial facilities which can be converted to light manufacturing and incorporate distributed generation can be considered for Brownfield Incentives along with the many other energy efficiency related tax breaks.
In the October 2005 Special Session, The CT state legislature passed Public Act 05-2 and PA 05-4. providing for a sales tax holiday on specific residential weatherization products from November 25, 2005 to April 1, 2006. PA 06-187 signed in May of 2006 established a continuation of the exemption from June 1, 2006 to June 30, 2007. This exemption covers the following home conservation items and energy-efficient appliances: Programmable thermostats; Window film; Caulking of a type marketed for preventing drafts, such as window and door caulking; Window and door weather strips, including door sweeps; Insulation, for example attic and wall insulation, spray foam insulation, water pipe insulation, heating duct insulation, and switch and outlet insulators; Water heater blankets; Water heaters; Boilers- only sales of boilers that meet the federal Energy Star standard qualify for the exclusion (Energy Star qualified boilers have annual fuel utilization efficiency (AFUE) rating of 85% or greater.); Natural gas furnaces that meet the federal Energy Star standard; Propane furnaces that meet the federal Energy Star standard; Windows that meet the federal Energy Star standard (Note that storm windows do not have an Energy Star standard and are not included in this tax exclusion.); Doors that meet the federal Energy Star standard (Note that storm doors do not have an Energy Star standard and are not included in this tax exclusion.); Oil furnaces that are not less than 85% efficient based on the AFUE rating; and Ground-based heat pumps that meet the minimum federal energy efficiency rating.
The Internal Revenue Service (IRS) will develop the final rules and forms to clarify which products and services qualify for the tax credits. Please note, not all homes, appliances, and products with the ENERGY STAR label qualify for a tax credit. |