GENERATE ENERGY TAX BREAKS!

Dear friends of RC Jones & Associates

Several clients have asked us about the tax incentives for energy savings contained in the new economic stimulus law (the American Recovery and Reinvestment Act of 2009). The new law changes may benefit both individual and business taxpayers. Following is a brief overview.

For individuals: The new law triples the residential energy credit to 30% of qualified expenditures (up from 10%). Furthermore, the lifetime $500 dollar cap is eliminated. It's been replaced by an overall limit of $1,500 for 2009 and 2010 combined. The changes are effective for energy-saving installations made after 2008 and before 2011.

The enhanced residential energy credit covers a wide range of improvements, including insulation materials; exterior windows (including skylights); exterior doors and central air conditioners.

The new law also removes the dollar caps for the separate 30% credit for expenditures on qualified solar hot water property, geothermal heat pumps and wind energy property. Caveat: A $500 cap per .5 kilowatt hour of capacity applies to qualified fuel cell property costs.

For businesses: A business building owner may claim a tax deduction equal to $1.80 per square foot of new or existing commercial buildings that meet certain conditions. Alternatively, partial deductions of up to $.60 per square foot are available for eco-friendly improvements affecting the building envelope, lighting systems or heating and cooling systems.

Under last year’s Emergency Economic Stabilization Act, deductions may be claimed for property placed in service after 2006 and before 2014 if certain conditions are met.

Finally, the 2009 Stimulus Act includes numerous other technical modifications. For instance, it extends the credit for electricity produced from renewable sources through 2013 (through 2012 for wind facilities).

This is only a brief summary of the key rules. It is important to understand these tax breaks before you make any energy-saving installations. Contact us at (816) 792-9966 to obtain an assessment.

Very truly yours,
Robert C. Jones

www.RCJonesInc.com