Late Changes to Senate Tax Extenders Bill Cuts
25c Tax Credit Value

by Charlie McCrudden / ACCA®

The Senate version of the tax extender package negotiated by the President Obama and Congressional leaders was released last night. As expected it includes a two year extension of the Bush tax cuts for all income levels, lower capital gains tax rate for investors, increases the exemption for the estate tax to $5 million per individual and lowers the tax rate to 35%, and enacts the Alternative Minimum Tax “patch” for 2010 and 2011, and other pro-small businesses provision.

Unfortunately, while the tax package does include an extension of the 25c nonbusiness energy tax credits, (the official IRS name for the homeowner’s energy efficiency tax credit), last minute modifications were made resetting the credit value to pre-Stimulus bill levels of 10% of the installed costs with maximum credit for all qualified retrofits of $500.

Click here to see a summary of the whole tax extenders package, and go to the bottom of page six and see the heading Energy-Efficient Existing Homes.

The tax package also reinstates the caps on equipment that were in place in 2006 and 2007. That means the maximum tax credits available to an eligible taxpayer for installing a qualified central air condition and heat pump are $300, and the maximum tax credit available for a qualified furnace or boiler is $150.

The tax extender package also reinstates the  lifetime credit caps which disqualify any homeowner who has claimed more than $500 in 25c tax credits since January 1, 2005, from any further credits.

Finally, the qualifying guidelines for natural gas and propane hot water boilers, and oil furnaces and hot water boilers are increased to 95% AFUE.

I’m still wading through all the language to see what other changes may be buried in the legislative text.

Still no word on whether or not substantive changes will allowed during Senate or House debate, more details about that will be forthcoming, including how you can support any efforts through grassroots action.

Charlie McCrudden is ACCA vice president of government relations.

The Senate version of the tax extender package negotiated by the President Obama and Congressional leaders was released last night. As expected it includes a two year extension of the Bush tax cuts for all income levels, lower capital gains tax rate for investors, increases the exemption for the estate tax to $5 million per individual and lowers the tax rate to 35%, and enacts the Alternative Minimum Tax “patch” for 2010 and 2011, and other pro-small businesses provision.

Unfortunately, while the tax package does include an extension of the 25c nonbusiness energy tax credits, (the official IRS name for the homeowner’s energy efficiency tax credit), last minute modifications were made resetting the credit value to pre-Stimulus bill levels of 10% of the installed costs with maximum credit for all qualified retrofits of $500.

Click here to see a summary of the whole tax extenders package, and go to the bottom of page six and see the heading Energy-Efficient Existing Homes.

The tax package also reinstates the caps on equipment that were in place in 2006 and 2007. That means the maximum tax credits available to an eligible taxpayer for installing a qualified central air condition and heat pump are $300, and the maximum tax credit available for a qualified furnace or boiler is $150.

The tax extender package also reinstates the  lifetime credit caps which disqualify any homeowner who has claimed more than $500 in 25c tax credits since January 1, 2005, from any further credits.

Finally, the qualifying guidelines for natural gas and propane hot water boilers, and oil furnaces and hot water boilers are increased to 95% AFUE.

I’m still wading through all the language to see what other changes may be buried in the legislative text.

Still no word on whether or not substantive changes will allowed during Senate or House debate, more details about that will be forthcoming, including how you can support any efforts through grassroots action.

Charlie McCrudden is ACCA vice president of government relations.