Energy Tax Credit

A A A

DEFINITION

An energy tax credit is given to homeowners who make their homes more energy-efficient by installing energy-efficient improvements. There are both federal energy tax incentives and state rebates. A tax credit is more valuable than an equivalent deduction because a credit reduces the tax dollar-for-dollar whereas a deduction only removes a percentage of the tax liability.



INVESTOPEDIA EXPLAINS

By researching, individuals can find several different types of energy-efficient improvements that will qualify for tax credits. For example, the American Recovery and Reinvestment Act of 2009 allowed qualified people to claim several credits such as: Home Energy Efficiency Improvement Tax Credits, Residential Renewable Energy Tax Credits and Automobile Tax Credits.




VIDEO

RELATED TERMS
  1. Cash For Caulkers

    The colloquial name for the United States' Home Star Energy Retrofit Act of ...
  2. Fuel Tax Credit

    A federal subsidy that allows businesses to reduce their taxable income dollar ...
  3. Alternative Fuels Tax Credit

    A non-refundable tax credit awarded to taxpayers who use non-alcohol alternative ...
  4. Write-Off

    A reduction in the value of an asset or earnings by the amount of an expense ...
  5. Deduction

    Any item or expenditure subtracted from gross income to reduce the amount of ...
  6. Tax Credit

    An amount of money that a taxpayer is able to subtract from the amount of tax ...
  7. Saver's Tax Credit

    A non-refundable tax credit available to lower income individuals and households ...
  8. New Alternative Transportation ...

    A bipartisan proposal introduced in April, 2011 that amends the Internal Revenue ...
  9. Rehabilitation Tax Credit

    A federal tax incentive to encourage real estate developers to renovate, restore ...
  10. Bush Tax Cuts

    A series of temporary income tax relief measures enacted by President George ...
comments powered by Disqus
Hot Definitions
  1. Maintenance Margin

    The minimum amount of equity that must be maintained in a margin account. In the context of the NYSE and FINRA, after an investor has bought securities on margin, the minimum required level of margin is 25% of the total market value of the securities in the margin account.
  2. Leased Bank Guarantee

    A bank guarantee that is leased to a third party for a specific fee. The issuing bank will conduct due diligence on the creditworthiness of the customer looking to secure a bank guarantee, then lease a guarantee to that customer for a set amount of money and over a set period of time, typically less than two years.
  3. Degree Of Financial Leverage - DFL

    A ratio that measures the sensitivity of a company’s earnings per share (EPS) to fluctuations in its operating income, as a result of changes in its capital structure. Degree of Financial Leverage (DFL) measures the percentage change in EPS for a unit change in earnings before interest and taxes (EBIT).
  4. Jeff Bezos

    Self-made billionaire Jeff Bezos is famous for founding online retail giant Amazon.com.
  5. Re-fracking

    Re-fracking is the practice of returning to older wells that had been fracked in the recent past to capitalize on newer, more effective extraction technology. Re-fracking can be effective on especially tight oil deposits – where the shale products low yields – to extend their productivity.
  6. TIMP (acronym)

    'TIMP' is an acronym that stands for 'Turkey, Indonesia, Mexico and Philippines.' Similar to BRIC (Brazil, Russia, India and China), the acronym was coined by and investor/economist to group fast-growing emerging market economies in similar states of economic development.
Trading Center