Energy Incentives

February 17, 2009:  Congress passed an economic stimulus package to promote energy efficiency.  The American Recover and Reinvestment Tax Act of 2009 includes several provisions modifying and expanding the scope of energy efficiency and renewable energy incentives.  For more information, visit www.irs.gov.

Home Builders

An eligible contractor who builds a new energy efficient home may qualify for a tax credit of up to $2,000.  The home must achieve 50 percent energy savings on heating and cooling.  At least 1/5 of the energy savings must come from building envelope improvements.  The home qualifies for the credit if:

• It is located in the United States.

• Construction is substantially completed after August 8, 2005.

• It meets statutory energy saving requirements.

• It is acquired from the eligible contractor after December 31, 2005, and before January 1, 2008, for use as a residence.

This credit also applies to contractors of manufactured homes conforming to Federal Manufactured Homes Construction and Safety Standards. 

Commercial Builders

A tax deduction of up to $1.80 per square foot is available for owners/designers of new and existing commercial properties who are saving at least 50 percent on heating and cooling costs.  Partial deductions of up to $0.60 per square foot can be taken for measures affecting any one of three building systems: the building envelope, lighting, or heating and cooling systems.