Wednesday, November 20, 2013
$2000 Energy Efficient Home Construction Credit Expiring Dec 31 2013
Builders of a dwelling unit certified to have annual heating and cooling consumption at least 50% below that of a "comparable dwelling unit" and meets related requirements as stated in IRS Notice 2008-35 have been eligible for a $2000 income tax credit since August 2005. There is also a $1000 income tax credit available if the certified annual heating and cooling consumption is at least 30% below a "comparable dwelling unit". Builders can claim this credit by completing IRS Form 8908 and attaching it to income your tax return. (In some cases you can do the simpler IRS Form 3800. Refer to Form 8908 instructions to determine if this applies to you.)
Homes that are substantially reconstructed and rehabilitated to these energy efficiency standards are also eligible for the credit.
If you are eligible for this credit, you will want to act quickly. This home energy efficiency credit was scheduled to expire in 2010 and was extended three more years to the current expiration date of December 31, 2013.
The home builder for this purpose is the person who owns and has basis in the qualified energy efficient home during its construction. If the owner hires a third party contractor to construct the home, and has basis in the home during construction, the person that hires the third party contractor is the one who is eligible to claim this credit. This provision is carefully worded. If you need help clarifying it, please be sure to get it!
The rules for certifying the reduced heating and cooling consumption are also spelled out in IRS Notice 2008-35, and include a requirement that it be done by an "eligible certifier", who is not related to the home builder and who had been accredited by the Residential Energy Services Network (RESNET) (or the equivalent rating network)
This credit for construction of new energy efficient homes is number 14 on a list of 55 expiring federal tax provisions. (For the full list of these, prepared by the Congressional Joint Committee on Taxation staff, click here.)
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