ENERGY TAX CREDIT

The IRS has issued the rules for the new federal tax credits for residential energy efficiency available under the Energy Policy Act of 2005.

Under the provision for energy efficient homes, an eligible contractor who constructs a qualified new energy efficient home may qualify for a credit of up to $2,000. The credit is available for all new homes, including manufactured homes constructed in accordance with the Federal Manufactured Homes Construction and Safety Standards.

The home qualifies for the credit if:

• It is located in the United States;
• Its construction is substantially completed after August 8, 2005;
• It meets the statutory energy saving requirements, and
• It is acquired from the eligible contractor after December 31, 2005, and before January 1, 2008, for use as a residence.

In general, to meet the energy saving requirements, a home must be certified to provide a level of heating and cooling energy consumption that is at least 30 to 50 percent in the case of manufactured homes, and 50 percent for other homes below that of a comparable home constructed in accordance with the standards of the 2004 Supplement to the 2003 International Energy Conservation Code. It must also have building envelope component improvements providing a level of heating and cooling energy consumption that is at least 10 percent below that of a comparable home.

(The above text is an excerpt from RESNET's tax credit info, to learn more click here).