Non-Business Energy Tax Credit

Time is running out to take advantage of energy saving investments in your principle residence. The Non-business Energy Property Tax Credit was increased as part of the American Recovery and Reinvestment Act of 2009. I've written about these before (and here)but wanted to bring them to your attention once again as they are set to expire at year end.

First, to qualify, the improvements must be placed in service before January 1, 2011.

Here are some of the important facts to keep in mind:

• The law increased the credit rate to 30 percent of the cost of all qualifying improvements and raised the credit limit to $1,500 total for 2009 and 2010 combined
• The credit applies to improvements in insulation, energy-efficient windows, and energy-efficient heating and air conditioning systems.
• For purposes of the credit, to qualify as "energy efficient", the product must generally meet certain standards. If you have questions, make sure you make the determination before you purchase the product to make sure you qualify.
• Manufacturers must certify that their products meet the standards and must provide a written statement to the taxpayer, either with the product or on their website.
• The improvements must be made to your principle residence located in the United States. A second home or rental property would not qualify for the particular credit.
• You must claim the credit on the tax return for the year that the improvements were made.

Oregon residents should also determine if their investment would qualify for the Oregon Residential Energy Tax Credit (RETC). Oregon residents might also qualify for special incentives from the Energy Trust of Oregon.

You should also check the Database for State Incentive for Renewables & Efficiency to what other local incentives might be available around the country.

Changes to Oregon's BETC

The Oregon Legislature, in an effort to address budget issues and to fine tune the Business Energy Tax Credit (BETC) program, has made changes that local readers may want to know about.

The attorneys at Lane Powell have done an excellent job summarizing the changes including the new limits. You can read their summary here.

Corporate taxes in Oregon

The Oregon legislature passed a bill this last session increasing the minimum corporate tax from $10 to $150. The $10 minimum fee hasn't changed since 1931! Faced with massive budget deficits, the legislature enacted a combination of spending cuts and increased taxes to address the problem.

The bill was challenged through the referendum process so the issue will be voted on by Oregon voters in January. A "Yes" vote will keep the tax increases and the services these funds provide, a "No" vote will stop the tax increase forcing a deep cut in human services.

The legislative spending cuts were deep and real. I've talked to teachers who now have 3-5 more kids in every class increasing their workload. My teenage daughter has mentioned both the increased class size and the decreased school district support for athletics, music and other extra curricula activities like debate, dance, and more.

The tax increases were responsible and targeted. The tax increase on individuals only hits those earning $125,000 ($250,000 for married couples) or more, and then, the tax increase only hits their income ABOVE $125,000 ($250,000 for married couples). For corporations, they increased the minimum tax as noted above, and, also added a gross receipts tax of .0015 for corporations with $500,000 or more in Oregon sales. Both of these groups (corporations and wealthy people) can afford these very modest increases. Without the increases, the service cuts would be even deeper.

I had an "In My Opinion" piece in the morning's Oregonian. Check it our if you'd like to read more.

Domestic Partner Tax Filing in Oregon

The Oregon Dept. of Revenue (ODR) is preparing forms and special instructions to accommodate domestic partners in 2008 due to the new law finally recognizing these relationships.

Two new “statuses” have been added: Registered domestic partner filing jointly and Registered domestic partner filing separately. For ODR tax purposes, if domestic partners register in an Oregon county, they will be able to file as registered domestic partners. If the domestic partners are registered outside of Oregon, they will need to register in an Oregon county.

Because the federal government does not recognize domestic partners, it gets a little convoluted going from federal Form 1040 to the state return.

The partners will need to file their single federal returns and then prepare another federal return “As-if” a combined federal return were allowed for domestic partners. This “As-if” return will drive the amounts on the state return except for one major difference. The federal tax subtraction shown on the Oregon return will be the amount of the actual federal tax liabilities, less any economic stimulus rebates received.

While this solution isn't perfect, it should help many couples save money by filing together.

Wouldn't it be nice if the federal government would move into the 21st century and allow consenting adults to marry and/or partner up in anyway they so choose?