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Tax Credits
 

Available with Structural Insulated Panels:

HISTORY:
In 2005, the United States Energy Policy Act was signed. This legislation gives financial incentives to residential contractors and commercial building owners that build energy efficient homes and buildings. By using energy efficient building materials such as structural insulated panels 
(SIPs), builders and contractors can qualify for a $2000 tax credit
on residential homes or up to a $1.80 per square foot tax 
deduction on commercial buildings.

PROVISIONS:
Homebuilders are eligible for a $2,000 tax credit for a new energy efficient home that achieves fifty percent energy savings for heating and cooling over the 2003 International Energy Conservation Code (IECC) plus 2004 supplements. At least one fifth of the energy savings must come from building evelope improvement, achieved through higher levels of insulation and air sealing. A SIP building envelope delivers high R-value insulation while reducing air leakage; making SIPs an ideal option for meeting this requirement.

Builder tax credit for new homes

A $2,000 tax credit is available for builders of energy-efficient homes.  To qualify, the home must demonstrate a 50 percent reduction in heating and cooling energy over the 2003 International Energy Conservation Code (IECC), as determined by a qualified energy rater.  This credit was recently extended to homes built before December 31, 2011.

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Homeowner tax credits for existing homes

Building envelope improvements to existing homes, such as installing SIP insulated nailbase, are eligible for a 10% tax credit, with a cap of $500 per home.  This credit was also recently extended through December 31, 2011.

More info

Tax Deductions for Commercial Buildings

A tax deduction of up to $1.80 per square foot is available to owners or designers of new or existing commercial buildings that save at least 50% of the heating and cooling energy of a building that meets ASHRAE Standard 90.1-2001. Partial deductions of up to $.60 per square foot can be taken for measures affecting any one of three building systems: the building envelope, lighting, or heating and cooling systems. These tax deductions are available from January 1, 2006 through December 31, 2013.

HOW TO QUALIFY AND APPLY FOR COMMERCIAL TAX DEDUCTION:
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.

PARTIAL DEDUCTIONS:
In the case of a building that does not meet the whole building requirement of a 50 percent energy savings; a partial deduction is allowed for each separate building system that is certified by a qualified professional as meeting or exceeding the applicable system savings targets of the $1.80 per square foot commercial tax credits. The applicable system savings targets are those that would result in a total annual energy savings of fifty percent for the whole building, if each of the separate systems met the system target; note that the maximum allowable deduction is $0.60 per square foot. The separate building systems are: 

1.    Interior lighting system
2.    Heating, cooling, ventilation, and hot water systems
3.    Building envelope

For more information on partial deductions, consult IRS Notice 2006-52.

State and Local Tax Credits

The Database of State Incentives for Renewables & Efficiency (DSIRE) is a comprehensive source of information on state, local, utility, and federal incentives and policies that promote renewable energy and energy efficiency.

Click Here

TAX CREDIT VS TAX DEDUCTION:
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. 
 
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Lamit Industries, P.O. Box 07750, Columbus, OH 43207 • 614-444-3010 • 614-444-4264