On Saturday, October 8, 2005, Dave Wilke of Wilke and Associates CPA returned to the TAE airwaves for an “Ask the Accountant” segment devoted to the tax fallout from the 2005 Energy Policy Act. The act serves as a way for the I.R.S. to reward those who employ energy-efficient tactics as part of their everyday life. Starting January 1, 2006, those who employ these tactics will be eligible for tax credits.

With the Major League Baseball post-season in full swing, Dave decided to break the implications down into “singles” for individuals, and “home runs” for businesses.

1. SINGLES
   • Personal residence – People who purchase energy-efficient windows, appliances, and HVAC equipment for their primary home (as opposed to a secondary home, like a summer home) anytime after January 1, 2006 will be eligible for up to $500 in tax credits. (These credits are subject to the alternative minimum tax.). This also applies to those who employ solar heating and cooling as well as other forms of solar energy to their homes.
   • Automobile – One of the growing trends in our more energy-conscious society is the emergence of hybrid automobiles on our roads. Tax credits of up to $3,500 will be offered to those who purchase these hybrids (specifically those that weigh under 8,300 pounds) for personal use. Plus, as the technology develops for fuel cell vehicles, look for credits of up to $12,000 for these vehicles as they become more prominent.
2. HOME RUNS
   • Commercial buildings – Starting January 1, 2006, businesses that build buildings using energy-efficient means of heating, roofing, lighting, and other features will be eligible for a full 100% tax credit for these installations. Same goes for existing buildings that make the upgrade to these energy-efficient features. In a sense, this would be the equivalent of being able to expense these installations.
     As a result, look for more and more energy-efficient commercial buildings along our landscape over the next few years. The numbers speak for themselves.

As always, Dave suggests that you consult with your accountant to clear up any confusion that may result from this policy. If you have any more questions about the tax fallout from the 2005 Energy Policy Act, give Wilke and Associates a call at (412) 278-2200, or check them out online at www.wilkecpa.com.