Geothermal and Small Wind Tax Credits Return

A few interesting easter eggs in the budget that passed last night:

• The geothermal and small wind residential energy tax credit. Generous tax breaks for home solar got extended in the last go-round, but geothermal home energy systems and small wind (yes, windmills) were left out. Now that’s fixed. For geothermal systems and windmills placed in service from Jan. 1, 2017 through 2019, the credit is 30% of the cost of the system, and then it drops to 26% for 2020 and 22% for 2021. It sunsets on Dec. 31, 2021. (That's the same phase-out schedule home solar is on.)

• The $500 energy-efficient home improvements tax credit. This one is listed under “energy” extenders, but it affects a homeowner’s personal tax return. You can get a tax credit (that’s a dollar-for-dollar reduction in your tax liability) of up to $500 (10% of the amount paid) for making energy-efficient home improvements like new windows or upgraded heating/a-c equipment.

Budget Deal Revives Expired Individual Tax Breaks For Homeowners, Students And Environmentalists

Not listed there, but fuel cells are also now included.

 

The article makes it sound like it is an extension (not new) of the previous $500 one that expired in 12/31/2016, but would have to see the bill to know for sure.

Maybe energy.gov will update this site soon then everything will be clear:

Residential Energy Efficiency Tax Credit | Department of Energy

Keep an eye on this section to see how it is updated:

Maximum Rebate:
For purchases made in 2011 - 2016: Aggregate amount of credit is limited to $500. Taxpayer is ineligible for this tax credit if this credit has already been claimed by the taxpayer in an amount of $500 in any previous year.​

For purchases made in 2009 or 2010: Aggregate amount of credit for all technologies placed in service in 2009 and 2010 combined is limited to $1,500​

I installed a high efficiency heat pump water heater a few months ago and hope to file taxes in a few days, so am interested in the re-booted:

• Electric heat pump water heater with an energy factor of at least 2.0: $300

 

This should be in product but not necessarily ready to file on 3/2/2018 in TurboTax. Not sure why TurboTax isn't ready to go, the IRS already has the updated instructions and updated form 5696 (https://www.irs.gov/pub/irs-pdf/i5695.pdf and https://www.irs.gov/pub/irs-pdf/f5695.pdf).

Resident Energy Credit (Form 5695) not available to file
Congress has passed the Bipartisan Budget Act of 2018 which has become a law. Included in this is the extension of expired tax extenders for 2017, the extension of energy efficient tax credits, and special tax relief for certain disaster victims.

The extender provision on Resident Energy Credit (Form 5695) is projected to be in-product on 03/02/2018 for you to access and enter your information, but you cannot yet file with the tax break.

Once we receive guidance that the IRS is ready to accept returns with the remaining tax breaks we will inform you if you sign up below for updates.​