Legislative Language & Pending Updates
January 1, 2013: “Fiscal Cliff” Bill Extends Expired Energy Efficiency Tax incentives
Several tax incentives were extended and changed through the American Taxpayer Relief Act of 2012, also known as the “fiscal cliff bill,” which passed Tuesday, Jan. 1, 2013. The residential tax incentives for existing homes, including purchases made in 2012, were extended through 2013. These incentives apply to:
- Windows, insulation, air sealing homes and duct sealing
- Air conditioners, heat pumps, furnaces and water heaters
There were also two incentives that were both extend and changed. The new homes credit provides an incentive to builders for new homes that reduce energy use relative to the IECC-2006 building code by at least 50%. This is a change from prior law that used the IECC-2003 as a base. The appliance credit provides an incentive to manufacturers for increased production of very-efficient refrigerators, clothes washers and dishwashers. These credits had several efficiency tiers in 2011; for 2012-2013, the higher tiers remain but the lowest (least efficient) tiers for clothes washers and dishwashers ended.
Also, Congress has begun to consider what to do with these tax credits as part of tax reform. No decisions are likely until the end of the year, but at a recent Senate Finance Committee hearing a variety of proposals were discussed.
February 17, 2009: Stimulus Package Extends, Enlarges Energy Efficiency Tax Incentives
Congress passed an economic stimulus package over the weekend that does much to promote energy efficiency. The American Recover and Reinvestment Tax Act of 2009 includes several provisions modifying and expanding the scope of the energy efficiency and renewable energy incentives. A few notable changes:
- Energy efficiency incentives for upgrades to existing homes have been extended, and are now available for 2009 and 2010.
- The financial cap for these incentives, which cover home envelope improvements as well as heating, cooling and water heating equipment, was increased to $1,500 (from $500).
- Lower caps, such as the $200 cap on new windows, have been abolished. The existing home incentives are now calculated at 30% of the cost of the installation, up to the $1,500 cap. The legislation is unclear on whether this includes both equipment and labor, however previous IRS rulings suggest that labor is NOT included.
- Standards for equipment eligibility have changed – see the individual topic pages under the Consumer tab for details (coming soon).
- On-site renewables (solar photovoltaic and hot water systems, small wind systems, and geothermal heat pumps) are now eligible for a tax incentive worth 30% of the total cost, without a cap.
- There are new incentives for plug-in electric vehicles, and plug-in conversion kits.
Please visit the measure-specific pages through the menus to the left for details.
October, 2008 – Legislative Update
On Oct. 3, 2008, the President signed into law legislation to extend many of the Energy Efficiency Tax Incentives first enacted in 2005 but that expired at the end of 2007 or that were scheduled to expire at the end of 2008. The bill also includes extensions of a variety of renewable energy tax incentives. The energy efficiency provisions include:
- An extension of the commercial buildings tax deduction to the end of 2013.
- An extension of the tax credit for efficient furnaces, boilers, air conditioners, water heaters and insulation and window upgrades to existing homes (covering improvements installed in 2009, but not 2008).
- A one-year extension of the new energy-efficient home tax credit, to the end of 2009.
- Three-years of manufacturer tax credits for sales of high-efficiency refrigerators, clothes washers, dishwashers, and dehumidifiers (2008-2010).
- A new tax credit for plug-in hybrid vehicles purchased starting in 2008 and extending until shortly after the number of qualifying vehicles reaches 250,000.
- A new 10% investment tax credit for combined heat and power systems (through 2016)
- An extension of fuel cell and microturbine credits to the end of 2016.
- Accelerated depreciation for smart meters and smart grid systems.
- Extension of an existing bonding program for green buildings and sustainable design, and establishment of a new energy conservation bond program that would help local and state governments to fund energy conservation efforts.
The bill pays for these provisions by restricting several oil and gas industry tax breaks, and tightening some provisions on the sale of stocks.
For more information, see these links: