UNITED STATES CODE
TITLE 26. INTERNAL
REVENUE CODE
SUBTITLE A. INCOME TAXES
CHAPTER 1. NORMAL TAXES AND SURTAXES
SUBCHAPTER A. DETERMINATION OF TAX LIABILITY
PART IV. CREDITS AGAINST TAX
SUBPART A. NONREFUNDABLE PERSONAL CREDITS
26 USC § 25C
§ 25C. Nonbusiness energy property.
(a) Allowance of credit. In the case of an individual, there shall be allowed
as a credit against the tax imposed by this chapter for the taxable year an
amount equal to 30 percent of the sum of--
(1) the amount paid or incurred by the taxpayer during such
taxable year for qualified energy efficiency improvements, and
(2) the amount of the residential energy property
expenditures paid or incurred by the taxpayer during such taxable year.
(b) Limitation. The aggregate amount of the credits allowed under this section
for taxable years beginning in 2009 and 2010 with respect to any taxpayer shall
not exceed $ 1,500.
(c) Qualified energy efficiency improvements. For purposes of this section--
(1) In general. The term
"qualified energy efficiency improvements" means any energy efficient
building envelope component which meets the prescriptive criteria for such
component established by the 2000 International Energy Conservation Code, as
such Code (including supplements) is in effect on the date of the enactment of
this section (or, in the case of a metal roof with appropriate pigmented
coatings, or an asphalt roof with appropriate cooling granules, which meet the
Energy Star program requirements), if--
(A) such component is installed in or on a
dwelling unit located in the United States and owned and used by the taxpayer
as the taxpayer's principal residence (within the meaning of section 121),
(B) the original use of such component commences
with the taxpayer, and
(C) such component reasonably can be expected to
remain in use for at least 5 years.
(2) Building envelope component. The term "building
envelope component" means--
(A) any insulation material or system which is
specifically and primarily designed to reduce the heat loss or gain of a
dwelling unit when installed in or on such dwelling unit and meets the
prescriptive criteria for such material or system established by the 2009
International Energy Conservation Code, as such Code (including supplements) is
in effect on the date of the enactment of the American Recovery and
Reinvestment Tax Act of 2009,
(B) exterior windows (including skylights),
(C) exterior doors, and
(D) any metal roof or asphalt roof installed on
a dwelling unit, but only if such roof has appropriate pigmented coatings or
cooling granules which are specifically and primarily designed to reduce the
heat gain of such dwelling unit.
(3) Manufactured homes included. The term "dwelling
unit" includes a manufactured home which conforms to Federal Manufactured
Home Construction and Safety Standards (part 3280 of title 24, Code of Federal
Regulations).
(4) Qualifications for exterior windows, doors, and
skylights. Such term shall not include any component described in subparagraph
(B) or (C) of paragraph (2) unless such component is equal to or below a U
factor of 0.30 and SHGC of 0.30.
(d) Residential energy property expenditures. For purposes of this section--
(1) In general. The term
"residential energy property expenditures" means expenditures made by
the taxpayer for qualified energy property which is--
(A) installed on or in connection with a
dwelling unit located in the United States and owned and used by the taxpayer
as the taxpayer's principal residence (within the meaning of section 121), and
(B) originally placed in service by the
taxpayer.
Such term includes expenditures for labor costs properly
allocable to the onsite preparation, assembly, or original installation of the
property.
(2) Qualified energy property.
(A) In general. The term "qualified energy
property" means--
(i)
energy-efficient building property,
(ii) any qualified
natural gas furnace, qualified propane furnace, qualified oil furnace,
qualified natural gas hot water boiler, qualified propane hot water boiler, or
qualified oil hot water boiler, or
(iii) an advanced main
air circulating fan.
(B) Performance and quality standards. Property
described under subparagraph (A) shall meet the performance and quality
standards, and the certification requirements (if any), which--
(i)
have been prescribed by the Secretary by regulations (after consultation with
the Secretary of Energy or the Administrator of the Environmental Protection
Agency, as appropriate), and
(ii) are in effect at the
time of the acquisition of the property, or at the time of the completion of
the construction, reconstruction, or erection of the property, as the case may
be.
(C) Requirements and standards for air
conditioners and heat pumps. The standards and requirements prescribed by the
Secretary under subparagraph (B) with respect to the energy efficiency ratio
(EER) for central air conditioners and electric heat pumps--
(i)
shall require measurements to be based on published data which is tested by
manufacturers at 95 degrees Fahrenheit, and
(ii) may be based on the
certified data of the Air Conditioning and Refrigeration Institute that are
prepared in partnership with the Consortium for Energy Efficiency.
(3) Energy-efficient building property. The term
"energy-efficient building property" means--
(A) an electric heat pump water heater which
yields an energy factor of at least 2.0 in the standard Department of Energy
test procedure,
(B) an electric heat pump which achieves the
highest efficiency tier established by the Consortium for Energy Efficiency, as
in effect on January 1, 2009.
(C) a central air conditioner which achieves the
highest efficiency tier established by the Consortium for Energy Efficiency, as
in effect on January 1, 2009,
(D) a natural gas, propane, or oil water heater
which has either an energy factor of at least 0.82 or a thermal efficiency of
at least 90 percent.
(E) a stove which uses the burning of biomass
fuel to heat a dwelling unit located in the United States and used as a residence
by the taxpayer, or to heat water for use in such a dwelling unit, and which
has a thermal efficiency rating of at least 75 percent, as measured using a
lower heating value.
(4) Qualified natural gas, propane, and oil furnaces and hot
water boilers.
(A) Qualified natural gas furnace. The term
"qualified natural gas furnace" means any natural gas furnace which
achieves an annual fuel utilization efficiency rate of not less than 95.
(B) Qualified natural gas hot water boiler. The
term "qualified natural gas hot water boiler" means any natural gas
hot water boiler which achieves an annual fuel utilization efficiency rate of
not less than 90.
(C) Qualified propane furnace. The term
"qualified propane furnace" means any propane furnace which achieves
an annual fuel utilization efficiency rate of not less than 95.
(D) Qualified propane hot water boiler. The term
"qualified propane hot water boiler" means any propane hot water
boiler which achieves an annual fuel utilization efficiency rate of not less
than 90.
(E) Qualified oil furnaces. The term
"qualified oil furnace" means any oil furnace which achieves an
annual fuel utilization efficiency rate of not less than 90.
(F) Qualified oil hot water boiler. The term
"qualified oil hot water boiler" means any oil hot water boiler which
achieves an annual fuel utilization efficiency rate of not less than 90.
(5) Advanced main air circulating fan. The term
"advanced main air circulating fan" means a fan used in a natural
gas, propane, or oil furnace and which has an annual electricity use of no more
than 2 percent of the total annual energy use of the furnace (as determined in
the standard Department of Energy test procedures).
(6) Biomass fuel. The term "biomass fuel" means any
plant-derived fuel available on a renewable or recurring basis, including
agricultural crops and trees, wood and wood waste and residues (including wood
pellets), plants (including aquatic plants), grasses, residues, and fibers.
(e) Special rules. For purposes of this section--
(1) Application of rules. Rules similar to the rules
under paragraphs (4), (5), (6), (7), and (8) of section 25D(e)
shall apply.
(2) Joint ownership of energy items.
(A) In general. Any expenditure otherwise
qualifying as an expenditure under this section shall
not be treated as failing to so qualify merely because such expenditure was
made with respect to two or more dwelling units.
(B) Limits applied separately. In the case of
any expenditure described in subparagraph (A), the amount of the credit
allowable under subsection (a) shall (subject to paragraph (1)) be computed
separately with respect to the amount of the expenditure made for each dwelling
unit.
(f) Basis adjustments. For purposes of this subtitle, if a credit is allowed
under this section for any expenditure with respect to any property, the
increase in the basis of such property which would (but for this subsection)
result from such expenditure shall be reduced by the amount of the credit so
allowed.
(g) Termination. This section shall not apply with respect to any property
placed in service--
(1) after December 31, 2007, and before January 1, 2009, or
(2) after December 31, 2010.