2006 Income Tax Credits

2006 Income Tax Credits

If you replace or install new items in your home during 2006 you may qualify for an IRS credit for a portion of the cost of those items. Here is part of IRS bulletin 505 regarding energy property credit.
If you have questions or need more help with this, call me for the name of a qualified professional tax CPA person to help you.
IRS bulletin 505 excerpt
Nonbusiness energy property credit. You may be able to take a credit equal to (a) 10% of the amount paid in 2006 for qualified energy efficiency improvements installed during 2006, plus (b) any residential energy property costs paid in 2006. However, this credit is limited as follows.
· A total accumulated credit limit of $500 for all tax years.
· A maximum accumulated credit limit of $200 for windows for all tax years.
· A maximum credit for residential energy property costs of $50 for any advanced main air circulating fan; $150 for any qualified natural gas, propane, or oil furnace or hot water boiler; and $300 for any item of energy efficient building property.
Qualified energy efficiency improvements. Qualified energy efficiency improvements are the following items installed on or in your main home located in the United States if such items are new and can be expected to remain in use for at least 5 years.
· Any insulation material or system that is specifically or primarily designed to reduce the heat loss or gain of a home when installed in or on such home.
· Exterior windows (including skylights).
· Exterior doors.
· Any metal roof installed on a home, but only if such roof has appropriate pigmented coatings specifically and primarily designed to reduce the heat gain of such home.
To qualify for the credit, qualified energy efficiency improvements must meet certain energy efficiency requirements. Residential energy property costs. Residential energy property costs are costs of new qualified energy property that is installed on or in connection with your main home located in the United States. This includes labor costs properly allocable to the onsite preparation, assembly, or original installation of the property. Qualified energy property is any of the following.
· Certain electric heat pump water heaters; electric heat pumps; geothermal heat pumps; central air conditioners; and natural gas, propane, or oil water heaters.
· Qualified natural gas, propane, or oil furnace or hot water boilers.
· Certain advanced main air circulating fans used in a natural gas, propane, or oil furnace.
To qualify for the credit, qualified energy property must meet certain performance and quality standards