In addition to permanently extending the Bush-era tax cuts for most taxpayers, revising tax rates on ordinary and capital gain income for high-income individuals, modifying the estate tax, providing permanent relief from the AMT, and imposing limits on the deductions and exemptions of high-income individuals, the recently enacted 2012 American Taxpayer Relief Act extends a host of important energy-related tax breaks for individuals and businesses. I'm writing to give you an overview of these key tax breaks that were extended by the new law. Please call our office for details of how the new changes may affect you or your business.
The various energy credits extended include:
- The nonbusiness energy property credit for energy-efficient existing homes is retroactively extended for two years through 2013. A taxpayer can claim a 10% credit on the cost of: (1) qualified energy efficiency improvements , and (2) residential energy property expenditures, with a lifetime credit limit of $500 ($200 for windows and skylights).
- The alternative fuel vehicle refueling property credit is retroactively extended for two years through 2013 so that taxpayers can claim a 30% credit for qualified alternative fuel vehicle refueling property placed in service through Dec. 31, 2013, subject to the $30,000 and $1,000 thresholds.
- The credit for 2- or 3-wheeled plug-in electric vehicles is modified and retroactively extended for two years through 2013.
- The cellulosic biofuel producer credit is modified and extended one year through 2013.
- The credit for biodiesel and renewable diesel is retroactively extended for two years through 2013.
- The production credit for Indian coal facilities placed in service before 2009 is extended one year. The credit applied to coal produced by the taxpayer at an Indian coal production facility during the 8-year period beginning on Jan. 1, 2006, and sold by the taxpayer to an unrelated person during such 8-year period and the tax year.
- The credits with respect to facilities producing energy from certain renewable resources is modified and extended one year. A facility using wind to produce electricity will be a qualified facility if it is placed in service before 2014.
- The credit for energy-efficient new homes is retroactively extended for two years through 2013.
- The credit for energy-efficient appliances is retroactively extended for two years through 2013.
- The additional depreciation deduction allowance for cellulosic biofuel plant property is modified and extended one year.
- The special rule for sale or disposition to implement federal energy regulatory commission (FERC) or State electric restructuring policy for qualified electric utilities is retroactively extended for two years through 2013.
- The alternative fuels excise tax credits for sale or use of alternative fuels or alternative fuel mixtures is retroactively extended for two years though 2013.