Last Year for Certain Energy-Related Credits


The following energy-related credits
expire at the end of 2016.


power-poles-503935_960_720Nonbusiness Energy Property Tax Credit

You are entitled to an energy property tax credit if you made certain energy efficiency improvements during the year. The credit is equal to 10 percent of the amounts you paid for residential energy property expenditures (such as electric heat pumps, central air conditioners, and certain water heaters that achieve specified efficiency ratings), and is equal to the amounts you paid for qualified energy efficiency improvements (such as insulation, exterior windows and skylights, exterior doors, and certain types of roofs) installed during the tax year. There are various limitations, based on the type of property purchased, with a total $500 lifetime limitation on this credit.

Residential Energy Efficient Property Credit

You may be entitled to claim a credit for expenditures made in 2016 on residential energy efficient property. The credit is equal to the sum of 30 percent of what you paid for certain solar electric property, solar water heating property, fuel cell property, small wind energy property, and geothermal heat pump property. While the credit for expenditures made for qualified fuel cell property is limited to $500 for each onehalf kilowatt of capacity of the property, the amounts of the other qualified expenditures eligible for the credit are not limited.

Credits for Certain Motor Vehicles and Vehicle-Related Property

Various credits are available for certain energy efficient vehicles. A credit is available through 2016 for vehicles propelled by chemically combining oxygen with hydrogen and creating electricity (i.e., fuel cell vehicles). This credit potentially applies to four separate categories of vehicles: (1) fuel cell vehicles, (2) advanced lean burn technology vehicles, (3) hybrid vehicles and (4) alternative fuel vehicles. The base credit is $4,000 for vehicles weighing 8,500 pounds or less. Heavier vehicles can get up to a $40,000 credit, depending on their weight. An additional $1,000 to $4,000 credit is available to the extent a vehicle’s fuel economy exceeds certain fuel economy standards.

Additionally, the purchase of certain refueling property for alternative fuel vehicles may be eligible for a credit of 30 percent of the cost of such property. The credit is limited to $1,000.

Finally, if you acquired a qualified plug-in electric drive motor vehicle during the year, you may be eligible for a credit of up to $7,500. This generally applies to large four-wheel electric vehicles. A separate credit applies to qualified two- or three-wheeled plugin electric vehicles.

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About cozbycpa

Heather L. Cozby is a CPA on the South Shore and Cape Cod. The managing partner of Cozby & Company, LLC, Heather has the resources and experience necessary to provide quality professional services on a timely basis and at a reasonable cost. She specializes in tax planning & preparation; audit, review & compilation services; management advisory services; bookkeeping; and accounting. Her unique niche is in working with homeowners’ associations and condominium trusts, advising with rental real estate, and providing outsourced financial consulting for mid-sized companies. She is more entrepreneurial than most accountants, and offers the best of both worlds - providing the services of a larger firm while retaining the ability to connect with her clients on a personal level.
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