Rental Property Owners - Recovery Act offers Additional Tax Deductions

Rental Property Owners - Recovery Act offers Additional Tax Deductions

I was recently searching the IRS website looking for ways to reduce my tax burdens I ran across the section of the irs website that discusses the Recovery Act. I decided to submit it here, because I did not know if many of you were aware of these tax deductions. you can find the REcovery Act at
Here is a snap shot of the Energy Efficiency part of the Act that could offer rental property owners some additional tax breaks and reduce your expenses for utilities. In some cases, it might even make your rental more attractive to certain types of renters or warrant a higher rent amount.

"The American Recovery and Reinvestment Act (ARRA) provides numerous tax incentives for individuals to invest in energy-efficient products.

Residential Energy Property Credit (Section 1121): The new law increases the energy tax credit for homeowners who make energy efficient improvements to their existing homes. The new law increases the credit rate to 30 percent of the cost of all qualifying improvements and raises the maximum credit limit to $1,500 for improvements placed in service in 2009 and 2010.

The credit applies to improvements such as adding insulation, energy efficient exterior windows and energy-efficient heating and air conditioning systems.

A similar credit was available for 2007, but was not available in 2008. Homeowners should be aware that the standards in the new law are higher than the standards for the credit that was available in 2007 for products that qualify as “energy efficient” for purposes of this tax credit. The IRS has issued Notice 2009-53 that will allow manufacturers to certify that their products meet these new standards.

Until the guidance is released, homeowners generally may continue to rely on manufacturers’ certifications that were provided under the old guidance. For exterior windows and skylights, homeowners may continue to rely on Energy Star labels in determining whether property purchased before June 1, 2009, qualifies for the credit. Manufacturers should not continue to provide certifications for property that fails to meet the new standards.

Residential Energy Efficient Property Credit (Section 1122): This nonrefundable energy tax credit will help individual taxpayers pay for qualified residential alternative energy equipment, such as solar hot water heaters, geothermal heat pumps and wind turbines. The new law removes some of the previously imposed maximum amounts and allows for a credit equal to 30 percent of the cost of qualified property. See Notice 2009-41."

Happy Hunting!


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Thanks for providing the information regarding the American Recovery and Reinvestment Act. It is great to know that this act provides tax incentives for individuals to invest in energy-efficient products. I know the local Home Depot had some signs up regardign this and it sounds like it may be great to look into. thansk for the insight. Believe and Achieve! Smiling - Joe


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