Q: I just recently purchased a house and was going to file an amended return for 2008 to get the tax credit. The house is a green home and has a bunch of Energy Star improvements. If I re-file, will I be able to take advantage of those tax breaks or will I have to wait until I file in 2009?
Chris, Fuquay-Varina, NC
A: First, congratulations on your home purchase. For those who don’t know, since you bought your home in 2009, you may qualify for a first-time homeowner’s tax credit of up to $8,000 ($4,000 for married filing separately). The great thing about this credit is the law allows you to take it on your 2008 return or wait until you file your 2009 return.
Just be sure you read the fine print. You do not have to repay the credit, provided that you keep this as your principal residence for 36 months after your purchase date. Also, the amount of the credit begins to phase out for taxpayers whose adjusted gross income is more than $75,000 or $150,000 for joint filers. Finally, you are considered to be a first-time homebuyer if you, and your spouse if you are married, did not own any other main home during the three-year period ending on the date of purchase.
If all that applies, great; go for the credit, and why not get it now instead of waiting until next year.
Now, as for your energy tax credits.
It appears, as I read the details at the IRS Web site, you can’t take the energy credits on your 2008 return. You bought the home in 2009, so you have to take the credits on your 2009 return. You can certainly double check with a tax professional, but this is what the IRS says: “You may be able to claim a nonbusiness energy property credit of 30 percent of the cost of certain energy-efficient property or improvements you placed in service in 2009.”
The IRS says the credit can be applied for items that include high-efficiency heat pumps, air conditioners, and water heaters. It also may include energy-efficient windows, doors, insulation materials and certain roofs. The credit has been expanded to include certain asphalt roofs and stoves that burn biomass fuel.
Just so you know, the total amount of credit you can claim in 2009 and 2010 is limited to $1,500.
Click on this IRS link, “Energy Provisions of the American Recovery and Reinvestment Act of 2009,” for additional information about the energy provisions of the act.