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Don’t file your 2012 tax return yet!!!

by admin on February 6, 2013

Form 5695 is used for Residential Energy Tax Credits

You could have tax credits coming that you didn’t know about!!!

Some homeowners who invested in high efficiency heating and cooling equipment got a nice surprise when The American Taxpayer Relief Act of 2012 was signed into law on January 2nd of 2013.  Most of the discussion surrounding the bill focused on tax rates.  What got ignored by the main stream media is that the bill also extended the federal tax credits available to homeowners who invested in high efficiency heating and cooling equipment during 2012.

These are the same tax credits that we all thought were gone for good at the end of 2011.  In fact, in April of 2012 I hosted Paul Stalknecht, the President of the Air Conditioning Contractors of America, for a short Q&A session.  During the meeting I asked him what he thought the chances of an extension of the tax credits were, and he flat out told us to forget about them.  He said nobody in Washington was talking about them, and they were gone for good.  Oops.

So here is a brief overview of the tax credits that those of us in the River Valley should know about.

  • Dates – To receive the tax credit on your 2012 tax return, the qualifying products must have been purchased and placed in service in the 2012 calendar year.
  • Tax Credit Amounts  – The amounts of the tax credits allowed to the homeowner are fixed amounts – $300, $150, or $50, depending on the product purchased.  In some cases, these amounts can be combined.
  • Limitations – The cumulative limit of Section 25c tax credits that can be claimed from 2006 all the way thru 2013 is $500.  In other words, if you have already claimed some 25c tax credits prior to 2012, you can only claim additional credits if the cumulative amount does not exceed $500.
  • Air conditioners & heat pumps that meet the efficiency requirements qualify for a $300 tax credit.
  • Gas furnaces that are 95% + efficient qualify for a $150 tax credit.
  • Indoor units that have an advanced main air circulating fan qualify for a $50 tax credit.

 

If you try to tackle the tax preparations on your own, you’re going to want to look for Form 5695.  You’ll need to use Part II of this form, and the items mentioned above are entered on line 24.

If you aren’t if the heating and cooling equipment installed qualifies for the tax credit, contact the contractor you purchased the equipment from.  They should be able to help you determine if it qualifies.  If it does, they should also provide you with a Manufacturer’s Certificate that you’ll want to keep with your tax records.