Energy Tax Credit
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Energy Tax Credit Energy Policy Act 2005 Tax credits for highly efficient new homes Tax credits for improvements to existing homes Tools What is the Difference? Tax Credit Tax Deduction Tax Credit reduces the amount of tax owed More economically powerful than deductions

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Presentation Transcript

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Energy Policy Act 2005

Tax credits for highly efficient new homes

Tax credits for improvements to existing homes

Tools


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What is the Difference?Tax CreditTax Deduction

Tax Credit reduces the amount of tax owed

More economically powerful than deductions

$2000 credit means $2000 savings

Tax Deduction reduces taxable income

Value of deduction dependent on taxpayer’s tax bracket

$2000 deduction means $600 savings (using 30% tax bracket)

Tools


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Energy Tax Credit – New Construction

  • Home builders are eligible for a $2000 tax credit for a new home that achieves 50% energy savings for heating and cooling over the 2004 IECC and supplements.

  • At least 1/5 of the energy savings must come from building envelope improvements (windows, sheathing, air barrier, insulation).

  • Other eligible improvements include HVAC and appliances.

  • Available through Dec. 31st 2008.


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Energy Tax Credit – New Construction

  • Homes should be tested by a 3rd party rater and test results must be submitted along with IRS form 8908.

  • Interesting fact: This credit would also apply to home improvement jobs where the builder is the owner and the home is completely stripped down to stud (removal of exterior veneer, sheathing, insulation, gyp board).


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Energy Tax Credit – Home Improvement

Tools

  • Section 1333 of the Energy Policy Act of 2005, Pub. L. No. 109-58, 119 Stat. 594 (2005) added Section 25C to the Internal Revenue Code. Section 25C provides a credit against tax for the taxable year in an amount equal to 10% of the sum of product costs (installation costs cannot be submitted for energy credit) for all qualified energy efficiency improvements on the taxpayer’s primary residence up to a maximum of $500.

  • The cost of DuPont™ Tyvek® and Tyvek® Tape when installed as an air barrier in a properly designed wall system is an Eligible Building Envelope Component.

  • Example: If a homeowner spends $6,000 on qualifying costs, their credit would be $500 ($6,000 x 10% = $600, but max is only $500).


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Energy Tax Credit – Home Improvement

  • Contractor/Installer must:

  • Install DuPont™ Tyvek® as an air barrier per DuPont installation guidelines; and

  • Install DuPont™ Tyvek® in a properly designed wall system.

  • Taxpayer must:

  • Retain the Manufacturer's Certification Statement;

  • Retain receipts from the contractor/installer detailing the qualifying costs; and

  • Submit Form 5695 with taxes.


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Energy Tax Credit

  • DuPont™ Tyvek® Manufacturer’s Certificate Statement is on www.construction.tyvek.com


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Tax Credit Eligibility-DuPont Building Envelope Components

Tyvek® Weatherization System

AtticWrap™

CommercialWrap®

DrainWrap™

HomeWrap®

StuccoWrap®

Tape

ThermaWrap™

Weatherization Sealant

DuPont™ certifies that these products are “Eligible Building Envelope Components” that qualify for the Federal Tax Credit of the Energy Policy Act of 2005


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Energy Tax Credits

  • Information on homeowner and builder tax credits (including forms) can be found at the Department of Energy website:

  • http://www.energystar.gov/index.cfm?c=products.pr_tax_credits


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