When tax time rolls around, those who have invested in green upgrades, and green lifestyle choices may benefit from a few designated green tax credits. These tax credits will not cover the majority of your expenses, but they can significantly reduce the amount of money you owe or increase the amount of money returned to you. Below are four of the green tax credits from which you may eligible for benefits.
Energy Efficiency Improvements If you are a homeowner who has remodeled your home, or made home improvements that meet the qualified criteria, then you can benefit from a green tax credit. This includes improvements that meet Energy Star qualifications for heating, cooling, insulating, and the installing of energy-efficient roofs, doors, and windows. Qualified homeowners can receive a tax credit of 30 percent, up to $1500 in spending.
Alternative Energy Additions Homeowners can also claim a green tax credit for upgrading to alternative energy equipment, such as geothermal heat pumps, wind turbines, and solar hot water heaters. The alternative energy equipment green tax credit is separate from the energy-efficient improvement credit, and still pays 30 percent of the qualified alternative equipment up to a designated dollar amount, depending on the type of addition you have selected.
Electric Vehicle Credit If you are not a homeowner, but still celebrate green living and have upgraded to an electric vehicle, you are eligible to receive a credit of 10 percent on the cost of your electric vehicle, up to $2500. If you kept your current car, yet installed a conversion kit between February 17, 2009 and December 31, 2011 and your vehicle in now a plug-in electric vehicle, then you may claim 10 percent of your costs, with a maximum of $4,000.
Commuter Credits If you carpool, take public transportation, an employee shuttle, or ride your bicycle to work, you may also be eligible for commuter tax credits. This can even include employees who drive to park-and-ride facilities, and commute part of the way to work to and from work each day. Depending on how your company designates their commuter benefits, you may be able to defer up to $245 a month of your pre-tax salary on commuting expenses; however, $245 is the maximum and most commuters defer much less. Some employers even reimburse for public transportation, gas mileage, or provide a monthly cycling allowance. Check with your employer to see what programs they have in place that you may qualify for.
Charitable Donations If one of the ways you support green living is to donate household items you no longer used to local charities or thrift stores, you can write-off donations that total more than $250. You will need to have a written record of your donation, which will be provided at your drop-off site. However, if your donations are greater than $500, you will need to fill out a special form. When selecting items for donation, remember that even broken and damaged items can be upcycled and turned into an entirely new product.
Each of the green tax credits mentioned above have specific criteria and qualifications you must meet to be eligible. To ensure that you qualify for the credits above, speak with your tax professional.