Milanese
by Mark Milanese
January 17th, 2013

Fiscal Cliff Rescue Saves Energy Tax Credits

Did you know the “American Taxpayer Relief Act of 2012” also reinstated energy efficiency tax credits for both business and private property owners?

Unless you have been living under a rock you know Congress saved the US economy from falling off the fiscal cliff by passing legislation known as the “American Taxpayer Relief Act of 2012. The bill was passed in the midnight hours of January 1 to stop federal budget cuts and automatic increases to most Americans’ income taxes. According to the hype, the Act grabbed the economy by the arm and saved it from falling to its death. The Act also extended, redefined and reinstated two business and personal tax credits for energy efficient residences that expired at the end of 2011.

The Act of Congress reinstated and extended individual tax credits of 10 percent (up to $500–but with a maximum credit of $200 for windows) for energy efficient improvements (such as qualifying doors and windows) to existing residential properties. The original tax credits expired on December 11, 2011. This act extends the credit to December 13, 2013 – retroactively to December, 2011. That means improvements placed in service in either 2012 or 2013 are now eligible.

In addition, the Congress reinstated, redefined and extended business tax credits of up to $2,000 for apartments, condos or singly-family homes. Now, developers and contractors can claim credits for each single unit providing complete independent living facilities for one or more persons in buildings not more than three stories high. This credit was also made retroactive by the Act of Congress to include properties constructed or significantly renovated to meet certain energy efficiency standards and placed in service in either 2012 or 2013.

The individual tax credit may not be sufficient to influence a purchasing decision. The business tax credit still may not be worth the additional investment to meet the energy efficiency requirements. But industry experts should be aware of the Act and how it impacts our industry.

How do you believe the reinstated tax credits will impact the door and window industry? Go to dwmmag.com and take the poll. Also, post your comments here.

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  1. Mark, your article leads one to believe that windows get 10% up to $500.00, but the original article I saw said that windows were limited to the $200.00 the same way the old one was prior to the 30/30 tax credit. Which is correct???

  2. Thanks for your comment Dan. The story has been updated to clarify that yes there is a maximum credit of $200 for windows.

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