Wednesday, December 22, 2010


Thanks to the NATP and other sources I think I now understand the extension of the residential energy credit in the compromise Tax Act.

In my initial post explaining the provisions of the Tax Hike Prevention Act of 2010 I mentioned that the residential energy credit was extended through 2011 only at “its pre-2009 Recovery Act parameters”.

The percentage has been scaled back from 30% to only 10%, and the maximum credit is reduced to only $500. The $500 limit is reduced by any credits claimed in 2006 through 2010, and the following additional limits apply (based on the “old” law) -

• $ 50.00 for each advanced main air circulating fan,
• $150.00 for each qualified natural gas, propane, or oil furnace or hot water heater,
• $ 200.00 for window components, and
• $300.00 for each item of energy-efficient building property (i.e. central air, heat pumps, water heaters).

For 2011 a natural gas, propane, or oil furnace or hot water boiler must have an “annual fuel utilization efficiency rate” of 95 or more, and a biomass fuel stove must have a thermal efficiency rating of at least 75%.

I think that is it. Do any of my fellow tax pros have anything to add?

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