Congress Extends Tax Credits in Final Days of Session

On Dec. 17, President Barack Obama signed critical tax legislation that included several important energy efficiency tax incentive extensions that were slated to expire at the end of the year.  

The new legislation (H.R. 4853, the Middle Class Tax Relief Act of 2010) includes extensions of the new energy efficient homes credit, the energy efficiency appliance manufacturing credit and the existing home energy efficiency improvement tax credit.

Congress Extends Energy Efficiency Provisions in Final-Days Action

During the last week before the crucial Senate vote, Alliance President Kateri Callahan issued a statement urging Congress to quickly extend these provisions. 

“For the last few weeks, the Alliance to Save Energy has urged policymakers to remember the pitfalls of extending these tax incentives – namely, higher energy bills and less disposable income for American families who are counting on Congress to turn around our still-struggling economy,” Callahan said in her statement.  She added that by continuing energy efficiency incentives, “Congress will help Americans keep their homes comfortable and their energy bills low in an unpredictable economy.

Incentives to Help Consumers

The bill, which will be in effect during calendar year 2011, provides several energy efficiency-related provisions:

• A federal income tax credit of up to $500 for homeowners who make certain energy-efficient improvements. This popular energy-efficient home retrofits credit has returned to pre-Recovery Act levels (e.g., $500 maximum instead of $1,500) with strengthened eligibility criteria.
• Limited credit for building materials  – such as insulation, sealing products, certain types of roof and energy-efficient windows – to 10 percent of their cost.  Windows also are subject to a flat $200 limit.
• Credits for manufacturers of energy-efficient appliances.
• A credit that could be claimed for installation of electric vehicle charging stations.
• An increased maximum value for pre-tax, employer-provided transit benefits.

"The tax incentives adopted today are a welcome signal to U.S. consumers, who currently face rising energy costs in a still-uncertain economy, that Uncle Sam will help them pay for energy efficiency improvements to make their homes more comfortable and their energy bills more affordable for years to come," Callahan said.

For more information

Questions on tax incentives?  Check out our Energy Efficiency Home and Vehicle Tax Credits resource.