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Tax Planning: Energy Incentives

by Brett Backues on December 18, 2011
Residential Energy Efficient Property Credit:  Until 2016, tax incentives are available to taxpayers who install certain energy-efficient property, such as photovoltaic panels, solar water heating property, fuel cell property, small wind energy property and geothermal heat pumps.  A credit is available for the expenditures incurred for such property up to a specific percentage, except that a cap applies for fuel cell property.  The property purchased cannot be used to heat swimming pools or hot tubs. If you have made improvements to your home or plan to by the end of 2011, please contact me to discuss the amount of the credit you may qualify for.
Nonbusiness Energy Property Credit:  For 2011, property qualifying for the nonbusiness energy property credit includes windows (including skylights), exterior doors, insulation, metal roofs, advanced main air circulating fans, natural gas, propane, or oil furnace or hot water boilers, and other energy efficient building property that meets certain energy standards.  For 2011, the credit is 10% of the cost of the improvement(s) up to a maximum credit of$500 (therefore, if you took any credit prior to 2011, your total cannot exceed $500).  The property must be installed by the end of 2011 to qualify.  For 2011, only $200 of the credit can be applied to windows.  Also, for 2011, the energy standards are relaxed.  The credit expires at the end of 2011.
Tax Planning: Business Credits
Sun, 12/18/2011 - 12:00am
Small Employer Pension Plan Startup Cost Credit:  For 2011, certain small business employers that did not have a pension plan for the preceding three years may claim a nonrefundable income tax credit for expenses of establishing and administering a new retirement plan for employees.  The credit applies to 50% in qualified administrative and retirement-education expenses for each of the first three plan years.  However, the maximum credit is $500 per year.
Employer-Provided Child Care Credit:  For 2011, employers may claim a credit of up to $150,000 for supporting employee child care or child care resource and referral services.  The credit is allowed for a percentage of “qualified child care expenditures”including for property to be used as part of a qualified child care facility, for operating costs of a qualified child care facility and for resource and referral expenditures.
Work Opportunity Credit:  The work opportunity credit is an incentive provided to employers who hire individuals in groups whose members historically have had difficulty obtaining employment.  This gives your business an expanded opportunity to employ new workers and be eligible for a tax credit against the wages paid.  Wages paid after 2011 are not eligible for the credit.
Credit for Employee Health Insurance Expenses of Small Employers:  For tax years beginning after 2009, eligible small employers are allowed a credit for certain expenditures to provide health insurance coverage for its employees.  Generally, employers with 10 or fewer full-time equivalent employees (FTEs) and an average annual per-employee wage of $25,000 or less are eligible for the full credit.  The credit amount begins to phase out for employers with either 11 FTEs or an average annual per-employee wage of more than $25,000.  The credit is phased out completely for employers with 25 or more FTEs or an average annual per-employee wage of $50,000 or more.  The credit amount is 35% of certain contributions made to purchase health insurance.