Federal Tax Credits for Energy Efficiency
A tax credit can provide significant savings. It reduces the amount of income tax you have to pay. Unlike a deduction, which reduces the amount of income subject to tax, a tax credit directly reduces the tax itself.
The following resources provide information on federal tax credits available to small businesses for making energy efficiency upgrades.
Tax Credits for Home Builders
Eligible contractors need to fill out IRS Form 8908 to get the tax credit. The IRS has provided the following guidance regarding the tax credits for constructing energy efficient new homes available under the Energy Policy Act of 2005:
- IRS Notice 2008-35 provides guidance for the credit for building energy efficient homes other than manufactured homes.
- IRS Notice 2008-36 provides guidance for the credit for building energy efficient manufactured homes.
Tax Credits for Manufacturers
The Tax Relief and Job Creation Act of 2010 modifies and extends the energy efficient appliance credit for certain dishwashers, clothes washers, and refrigerators manufactured after December 31, 2010.
Tax Deductions for Commercial Buildings
The commercial building deduction appears at new section 179D, which was enacted in the Energy Policy Act of 2005. The provision allows a deduction to a taxpayer who owns, or is a lessee of, a commercial building and installs property as part of the commercial building’s interior lighting systems, heating, cooling, ventilation, and hot water systems, or building envelope. Certification must be obtained to verify that the property installed satisfies the energy efficiency requirements of section 179D.
- IRS Notice 2006-52, Notice 2008-40 and Notice 2012-26 provide guidance on deduction for energy efficient commercial buildings
- Additional information from the IRS
Tax Incentives for Hybrid, Electric and Alternative Fuel Vehicles
Find out how you can save money through Federal tax incentives on your purchase of a new hybrid, plug-in hybrid, lean-burn, alternative fuel, or electric vehicle.