The Fiscal Cushion
Environmentalists heaved a sigh of relief earlier this month when, as part of its “fiscal cliff” legislation, Congress extended tax credits for utility-scale wind-energy projects. (The legislation also loosened the rules, covering projects whose construction began, and weren’t just “placed in service,” during the covered years.)
The funding bill also included other green-friendly provisions, many of which have gone largely unheralded. Most are merely extensions of existing benefits that had expired or were set to expire, but in this day and age, few greens are complaining.
Cleaner fuels: The legislation included tax credits and depreciation rules that support cellulosic ethanol and revived a biodiesel tax credit that expired at the end of 2011. Algae has also earned a spot as a favored biofuel.
Plug-in electric motorcycles: A 2009 tax credit was extended for electric motorcycles and scooters that gives buyers a break of up to 10 percent of the purchase price, up to $2,500.
Green remodeling: Homeowners can get a $500 tax credit on personal taxes for making certain energy-efficiency improvements to their primary residence. The provision expired in 2011, but has been extended retroactively to 2012 and forward through 2013. It covers 10 percent of your tab for energy-efficient upgrades -- from air conditioners and refrigerators to home insulation and new windows -- up to the $500 cap.
New green homes: The Business Tax Credit for New and Renovated Energy Efficient Residences offers a $2,000 tax credit to contractors or developers. It also expired in 2011 and has been extended retroactively to 2012 and forward through 2013.
Transit deductions The fiscal cliff legislation restores a provision that allows transit commuters to take a pretax deduction of $240. In 2012, commuters who drove a car and parked could take the $240, while transit users were limited to $125.
Just in case you were beginning to think Birkenstock-wearing legislators had taken over Capitol Hill, Congress also helped out the oil and gas industry by keeping dividend tax rates equal to capital gains tax rates, and extending tax credits for coal produced on Indian tribal land.
Image by iStock/deliormanli.
Reed McManus is a senior editor at Sierra. He has worked on the magazine since Ronald Reagan’s second term. For inspiration, he turns to cartoonist R. Crumb’s Mr. Natural, who famously noted: “Twas ever thus."