Residential Energy Credits | Energy-Efficient Windows | Energy Tax Credits

As much of the country prepares for the upcoming winter season, it is a great time to take advantage of the residential energy tax credits that are available.  One of these credits is set to expire at the end of 2013, so get it before it is gone.

There are two residential energy credits that are currently available: the residential energy property credit (Sec. 25C); and the residential energy efficiency property credit (Sec. 25D).  Currently, the Sec. 25C credit expires at the end of this year, while the Sec. 25D credit is available through 2016.

Property that qualifies for the Sec. 25C credit includes certain insulation, energy-efficient exterior windows/doors and energy-efficient HVAC systems, among others.  Examples of property that qualifies for the Sec. 25D credit include solar water heaters, geothermal heat pumps and wind turbines, among others.  The qualified property for both credits must be purchased, not leased.

Both of the credits are nonrefundable personal tax credits and can offset both regular tax and AMT.  Only the Sec. 25C credit can be carried forward to future tax years.  The Sec. 25C credit is 10% of the amount paid or incurred for the qualified energy improvements installed during the year.  The Sec. 25D credit is 30% of the amount paid for the qualified energy-efficient property during the year.  Keep in mind that the Sec. 25C credit does have a lifetime limitation of $500 (of which only $200 may be attributable to windows). 

IRS Notices 2009-41, 2009-53 and 2013-70 have additional details about both credits and explain what property qualifies for each.

Interested in learning more tax tips? Contact Eric Ingalls, a Schneider Downs Tax Manager, at

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