The federal government wants to encourage homeowners to make their homes as energy efficient as possible. To do so, back in 2005 Congress enacted a tax credit for “nonbusiness energy property.”
This was a tax credit (subject to a $500 lifetime cap) for certain energy efficiency improvements to a taxpayer’s existing principal residence. The credit expired at the end of 2011, but was brought back from the dead by the fiscal cliff tax deal back in February. It was made retroactive to apply to 2012 and then expire at the end of 2013.
So, if you haven’t used up your lifetime $500 limit already, 2013 could be your last chance to do so.