This week, like so many other folks, Scott and I completed our 2010 income tax return. Since we have put so much planning and money into the solar water heating system of our house, we were actually looking forward to a small portion of the process - form 5695, Residential Energy Credits. Since we were already aware of the limitations of the tax credit, we were not surprised when we read step one of part one which asks... Were the qualified energy efficiency improvements or residential energy property costs for your main home located in the United States... and then cautions... If you checked the “No” box, you cannot claim the non-business energy property credit. Do not complete Part 1. That section of the form only applies to existing homes that are primary residences. Once our Torrey house is finished, we'll sell our Logan house and move. Until that time, however, Part 1 of form 5695 does not apply to us.
It is the other side of the form, Part 2 - Residential Energy Efficient Property Credit - that addresses our situation, new construction. We were able to receive a credit in the amount of 30% of the 2010 cost of our system. Hooray! And we’ll be able to receive 30% of our 2011 expenses when we file next year’s tax return.
Sometimes the government passes legislation that helps the little guys. Hooray again!