Tax News

CCH (cch.taxgroup.com) reports:

  The IRS has released three pieces of guidance regarding energy credits that are available to both individuals and businesses.

IR-2009-44

  The IRS has reminded taxpayers of new tax benefits, enacted as part of the American Recovery and Reinvestment Tax Act of 2009 (P.L. 111-5), that are available to individuals and businesses that reduce energy use or to producers that create new energy sources. Taxpayers are encouraged to examine the new tax benefits and determine whether they qualify to claim the energy credit.

  Tax credits for energy-efficient improvements or installing alternative energy equipment have been increased and are available to homeowners. Homeowners seeking to claim these credits may rely, temporarily, on existing manufacturer certifications or Energy Star labels in determining which products are qualified until updated certification guidelines are announced within the next several months.

  In addition, under provisions relevant to energy producers, taxpayers who place in service facilities that produce electricity from wind or other renewable resources can choose either the energy investment tax credit, the renewable electricity production tax credit, or a grant from the Treasury Department.

FS-2009-10

  The IRS has issued a fact sheet summarizing the provisions of the Act that provide new, extended, or increased incentives for taxpayers' efforts to increase energy efficiency. The most in-depth discussion focuses on the residential energy property credit under Code Sec. 25C(a)(2). The credit is available for improvements including the addition of insulation, energy-efficient exterior windows, and energy-efficient heating and air conditioning systems.

  While a similar credit was available in 2007, some of the requirements for qualifying improvements have been made more stringent. Some property that qualified for the old credit will not qualify for the new one.

  Other credits discussed in the fact sheet include the residential energy efficient property credit (Code Sec. 25D), the plug-in electric drive vehicle credit (Code Sec. 30D), the plug-in electric vehicle credit for smaller vehicles (Code Sec. 30), the credit for plug-in electric drive conversion kits (Code Sec. 30B(a)(5)), the alternative motor vehicle credit (Code Sec. 30, the renewable energy production tax credit (Code Sec. 45), the energy investment credit (Code Sec. 48), and the credit for alternative fuel vehicle refueling property (Code Sec. 30C).

  The fact sheet also notes the increases in the volume limits on new clean renewable energy bonds (Code Sec. 54C), and on qualified energy conservation tax credit bonds (Code Sec. 54D), and the opportunity for businesses to obtain renewable energy grants in place of the energy investment credit or the renewable energy production credit (Code Sec. 48(d)).

Notice 2009-41

  The IRS has provided interim guidance relating to the credit provided for residential energy-efficient property under Code Sec. 25D placed in service for tax years beginning after December 31, 2008, and before January 1, 2017.

  The P.L. 111-5 amended Code Sec. 25D to set the applicable amount of a taxpayer's credit for expenditures on qualified solar electric property, qualified solar water-heating property; qualified fuel cell property; qualified small wind energy property; and qualified geothermal heat pump property. The credit extends to labor costs for site preparation, assembly, original installation and piping or wiring to connect the property to the dwelling.

  Manufacturers may certify to purchasers that the property meets the requirements necessary for claiming the credit under Code Sec. 25D. A certification statement may be packaged with the property, provided in a printable form on the manufacturer's website or in any other manner that permits the taxpayer to retain the certification statement for recordkeeping purposes. Certification statements must contain the name and address of the manufacturer, identification of the property as qualified property mentioned above, and appropriate identifiers of the property.

  Additionally, a certification statement must contain a declaration, signed by an individual currently authorized to bind the manufacturer. The guidance identifies the information that must be provided in the certification statement. The manufacturer may provide optional information including descriptions of the property and energy savings capacity. Specifically, for geothermal heat pump property, the manufacturer can state that the property meets the requirements of the Energy Star program.

IR-2009-44,
2009FED ¶46,345

FS-2009-10,
2009FED ¶46,346

Notice 2009-41, 2009FED ¶46,347

Treasury Department News Release, TDNR TG-99, 2009FED ¶46,348

Other References:

 
Code Sec. 25C

  CCH Reference - 2009FED ¶3843.10

 
Code Sec. 25D

  CCH Reference - 2009FED ¶3847.01

  CCH Reference - 2009FED ¶3847.025

 
Code Sec. 30

  CCH Reference - 2009FED ¶4056B.01

 
Code Sec. 30B

  CCH Reference - 2009FED ¶4059E.01

 
Code Sec. 30C

  CCH Reference - 2009FED ¶4059K.10

 
Code Sec. 30D

  CCH Reference - 2009FED ¶4059P.01

 
Code Sec. 45

  CCH Reference - 2009FED ¶4415.50

 
Code Sec. 48

  CCH Reference - 2009FED ¶4671.40

 
Code Sec. 48C

  CCH Reference - 2009FED ¶4695.01

 
Code Sec. 54C

  CCH Reference - 2009FED ¶4900.02

 
Code Sec. 54D

  CCH Reference - 2009FED ¶4908.01

  Tax Research Consultant

  CCH Reference - TRC INDIV: 57,700
CCH Reference - TRC INDIV: 57,750
CCH Reference - TRC INDIV: 57,800
CCH Reference - TRC INDIV: 57,850
CCH Reference - TRC INDIV: 58,000
CCH Reference - TRC BUSEXP: 51,100
CCH Reference - TRC BUSEXP: 54,550
CCH Reference - TRC BUSEXP: 55,802