American Recovery and Re-investment Act
(2009 Stimulus Package) expands small wind tax credits for homeowners,
businesses
Qualified
small wind turbines eligible for 30% tax credit, homewonwers and businesses
benefit from American Recovery and Re-investment Act (2009 Stimulus
Package)
Background
On February 17, 2009 President Obama signed the American Recovery and
Re-investment Act of 2009 into law. With a significant emphasis on renewable
energy technology deployment and job expansion, the bill improved upon
the 2008 tax credit, by removing “cost caps.” This change allows consumers
and small businesses to take a 30% tax credit off the installed cost
of a wind turbine. To a consumer or business purchasing a single 2.4KW
residential wind turbine, it will double their credit. Additionally,
businesses will also have the option of receiving their credit in the
form of a cash grant.
Q: What does the stimulus package mean
to me?
A: The entire cost of a turbine system
(plus installation) is reduced by 30 percent provided you have a tax
liability over the course of two years. Depending on where you live,
you could save even more! States have also implemented rebates for small
wind systems which can be used in addition to the Federal credit. Furthermore,
in the last two months alone, more than 30 States have introduced legislation
that either expands incentives for renewable energy and/or addresses
market barriers.
Q: How does a tax credit work?
A: Typically, a tax credit is money that
you can deduct from any money owed to the federal government at tax
time (tax liability). The small wind tax credit can be carried over
two years after the product is installed. For more information on how
to take advantage of the credit, we suggest that you speak to a tax
specialist.
Q: I don’t normally owe taxes – how
can I claim the credit?
A: You can only claim the credit based
on what you would owe in taxes (your tax liability after two years.)
If you do not normally receive a refund, you may want to consult with
a tax attorney to understand better what opportunities are available
to you.
Q: How do I claim the credit?
A: You will be required to file the long
form and itemize your deductions. The IRS form 5695 must be completed
and filed with your taxes. The current form does not reflect the changes
to the most recent legislation.
Q: Can someone who already owned a
turbine claim the tax credit?
A: If you purchased a turbine in 2008,
you qualify for the federal-level tax credit, passed as part of the
October 2008 bailout legislation, up to $2,400 per wind turbine with
a cap of $4000. If you purchased a turbine in 2008 but your dealer did
not install it until 2009, ask your dealer to write a letter indicating
that the wind turbine was not “commissioned” became operational 2009,
you would qualify for the 30 percent tax incentive in your 2009 filing
but could not take it off your 2008 taxes. Download
2008 Tax Form 5695
Q: What if I want to purchase and install
more than one Turbine?
A: The stimulus package allows for a 30
percent tax credit on the total cost of multiple units. There is no
cap on the 30 percent tax credit. Businesses may qualify for a grant
from the treasury in lieu of a tax credit.
Q: I heard I can get cash back rather than a tax credit – how does
that work?
A: Businesses can apply for a grant from the US treasury and rather
than a tax credit, receive a cash grant. The details are still being
worked out but should be in place by April or May. Keep in touch with
your dealer or the manufacturer for more information.
Q: Does this work for all small wind
systems?
A: Yes. The incentive is available to
all users of small wind systems.