How to Maximize Altenative Energy Investment Tax Credit Benefits?

If you are a private citizen or a company currently researching altenative energy, you must investigate and understand the qualifying factors before your invest your dollars. While the government has expanded alternative energy areas and is offering billions of dollars in grants, loans and tax credits, there are defined lines of criteria that you must meet in order to have your submission accepted.

A tax credit is not a deduction and therefore can be claimed whether the individual or company files an itemized Schedule A deduction. The benefit of a tax credit is that it can be applied directly to reduce that amount of tax dollars owed or increase the amount of dollars expected in a return.

To maximize any alternative energy investment tax credit, you must address what the Internal Revenue Service considers acceptable. There are both commercial and residential tax credits available and you will need to research the documents on the IRS website. Some requirements are very specific as to the types of altenative energy investment tax credits. These can involve the concept of placement in service as well as what the IRS considers to be ownership.

Not all alternative energy resources are available for tax credit benefits. The product that you may be investing in must be included in the certified list for tax credits. The company and installation of the product must also be included as part of the government recognized certification programs. The American Recovery and Reinvestment Act (Recovery Act) includes the details of the dollar amounts that may be expected for the investment and the amount that a taxpayer (or company) may receive as a tax credit benefit.

If you are a private citizen, you can investigate the secondary tax credit that was designed to encourage taxpayers to invest in alternative energy equipment. This equates to an approximate thirty percent of the investment dollars that will be available as an alternative energy investment tax credit. The topics can include: Residential Energy Property Credit, Residential Energy Efficiency Property Credit, Plug-In Electric Vehicle Drive Credit, Plug-In Electric Credit, Credit for Conversion Kits, Treatment of Alternative Motor Vehicle Credit As a personal credit allowed against Alternative Minimum Tax.

Businesses can take advantage of the commercial altenative energy investment tax credits through the Extension of the Renewable Energy Production Tax Credit (Section 1101) which extends the eligibility time; Election of Investment Credit in Lieu of Production Credit (Section 1102); Repeal of Certain Business Credits for Renewable Energy Property (Section 1103) and the Repeal of Temporary Increase in Credit for Alternative Fuel Vehicle Refueling Property (Section 1123). There are other grant programs that businesses can use to enhance their alternative energy investments.

The most important thing that you must remember is that you can take advantage of alternative energy tax credits, but you must follow the guidelines for acceptability before you make the investment itself.

The information supplied in this article is not to be considered as medical advice and is for educational purposes only.