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From the Energy Tax Incentive
Act of 2005 -- Personal Energy Credits for Non-business Use
1313. Nonbusiness Energy Property
Credit. A tax credit is available to individuals for the installation of
nonbusiness energy property, such as residential exterior doors and
windows, insulation, heat pumps, furnaces, central air conditioners and
water heaters (Code Sec. 25C, as added by the Energy Tax Incentives Act of
2005 (P.L. 109-58)). The credit is equal to the taxpayer’s: (1)
residential energy property expenditures plus (2) 10 percent of the cost
of qualified energy efficiency improvements. The credit is limited to a
lifetime maximum of $500 and no more than: $200 of the credit can be based
on expenditures for windows; $50 of the credit on any advanced main air
circulating fans; $150 of the credit on any qualified natural gas,
propane, or oil furnace or hot water boiler, and $300 of the credit on any
item of energy-efficient building property. The credit applies to
qualified energy efficiency improvements and qualified energy property
placed in service in 2006 and 2007. The property must be installed in, or
on a dwelling unit in the United States that is owned and used by the
taxpayer as the taxpayer’s principal residence and originally placed in
service by the taxpayer. Residential, energy property expenditures (heat
pumps, furnaces, central air conditioners and water heaters) may include
labor costs.
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