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Tax Credit Consulting: Federal Energy Tax Credit Clinton IA

With the Mid-East a mess, the environment looking iffy and prices climbing, energy issues are front and center. To promote changes to new energy sources, the federal energy tax credit system has been created.

Richard W. Lozier Jr.
(515) 283-4336
666 Walnut St
Des Moines, IA
Telecommunications, Real Estate, Insurance, Energy
Exeter University,University of Iowa
State Licensing

Sheila K. Tipton
(515) 243-7100
The Financial Center, 666 Walnut, Ste 2000
Des Moines, IA
Administrative Law, Energy, Employment, Telecommunications
Drake University Law School,Ohio University
State Licensing

H & R Block
(563) 243-1170
1109 N 2nd St
Clinton, IA
Heartland Tax Service
(563) 243-9151
1409 N 2nd St
Clinton, IA
(563) 242-0861
400 N Bluff Blvd
Clinton, IA
Matthew Scott Carstens
(319) 364-6000
201 3rd Avenue SE
Cedar Rapids, IA
Litigation, Real Estate, Antitrust, Energy
University of Iowa College of Law,American University,University of Michigan
State Licensing
Illinois, Iowa, Michigan

Paula Sue Dierenfeld
(515) 283-8023
700 Walnut Ste 1600
Des Moines, IA
Montgomery Accounting Systems
(563) 243-4350
818 1/2 N 2nd St
Clinton, IA
Lyons James E CPA PC
(563) 242-0053
111 S 4th St
Clinton, IA

Tax Credit Consulting: Federal Energy Tax Credit

Federal Energy Tax Credit

With the Mid-East a mess, the environment looking iffy and prices climbing, energy issues are front and center. To promote changes to new energy sources, the federal energy tax credit system has been created.

The Energy Policy Act of 2005, signed into law on August 8, 2005, offers consumers and businesses federal tax credits beginning in January 2006 for purchasing fuel-efficient hybrid-electric vehicles and energy-efficient appliances and products. Most of these tax credits remain in effect through 2007.

A tax credit is generally more valuable than an equivalent tax deduction because a tax credit reduces tax dollar-for-dollar, while a deduction only removes a percentage of the tax that is owed. Beginning in tax year 2006, consumers will be able to itemize purchases on their federal income tax form, which will lower the total amount of tax they owe the government. Importantly, the actual federal energy tax credit amounts will be set by the IRS in 2006.

Individuals and businesses who buy or lease a new hybrid gas-electric car or truck are eligible for, and can receive, an income tax credit of $250-$3,400 depending on the fuel economy and the weight of the vehicle. Hybrid vehicles that use less gasoline than the average vehicle of similar weight and that meet an emissions standard qualify for the credit. "Lean-burn" diesel vehicles could also qualify, but currently available diesel vehicles do not meet the emissions standard. There is a similar credit for alternative-fuel vehicles and for fuel-cell vehicles.

If individuals and businesses buy more than one vehicle, they are eligible to receive a tax credit for each. If a tax-exempt organization buys such a vehicle, the retailer is also eligible to receive another credit. Companies that buy heavy-duty hybrid trucks are also eligible for a larger tax credit. Currently, there is a $2,000 tax deduction for hybrid vehicles for the remainder of 2005.

Federal energy tax credit options also exist for homeowners. Consumers who purchase and install specific products, such as energy-efficient windows, insulation, doors, roofs, and heating and cooling equipment in the home can receive a tax credit of up to $500 beginning in January 2006.

The Act also provides a credit equal to 30% of qualifying expenditures for purchase for qualified photovoltaic property and for solar water heating property used exclusively for purposes other than heating swimming pools and hot tubs. The credit can't exceed $2,000.

Improvements must be installed in or on the taxpayer's principal residence in the United States. Home improvement tax credits apply for improvements made between January 1, 2006 and December 31, 2007.

Businesses are eligible for tax credits for buying hybrid vehicles, for building energy- efficient buildings, and for improving the energy efficiency of commercial buildings (as outlined in the Energy Policy Act of 2005).

Small producer biodiesel and ethanol credit. This credi...

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