The United States Energy Policy Act. This legislation gives financial incentives to residential builders and commercial building owners to build energy efficient buildings.
Homebuilders are eligible for a $2,000 tax credit for a new energy efficient home that achieves 50% energy savings for heating and cooling. At least one fifth of the energy savings must come from building envelope improvement, achieved through higher levels of insulation and air sealing. A RASTRA building envelope delivers high R-value insulation while reducing air leakage, making RASTRA panels an ideal option for meeting this requirement.
A tax deduction of up to $1.80 per square foot is available to owners (or designers, in the case of government-owned buildings) of new or existing commercial buildings. To qualify owners must demonstration that the building was constructed or reconstructed to save at least 50% of the heating, cooling, water heating, and interior lighting energy cost that meet ASHRAE Standard 90.1-2001. Partial deductions of up to $.60 per square foot can be taken for comparable reductions from any one of three building systems—the building envelope, lighting, or heating and cooling system—that meets goals consistent with achieving the 50% savings for the entire building.
Tax credits, as compared to tax deductions, directly reduce the amount of income tax owed. Tax deductions reduce the amount of income subject to tax.
To receive the $2000 tax credit for homes, the builder must follow the guidelines set out in IRS Notice 2006-27. To do so, the home must undergo an inspection from an Energy Rater certified through the Residential Energy Services Network (RESNET). The Internal Revenue Service has created IRS Form 8908 to guide contractors through the tax credit application process.
Owners of commercial buildings must follow the procedures listed in IRS Notice 2006-52. This notification provides guidance for full and partial deductions on new commercial construction and renovation. Since the financial incentive is a tax deduction, the Internal Revenue Service will continue to use standard forms to apply it to your taxes each year. Please consult a tax professional to learn how you can maximize your deduction.
