If you are a member of a qualified
piping or wiring to interconnect such property
Alternative Motor Vehicles and
to the home. This credit is limited to:
association for a condominium
● $2,000 for qualified photovoltaic property
You may be able to take a credit if you place
which you own or a tenant-
an energy efficient motor vehicle or alternative
stockholder in a cooperative
● $2,000 for qualified solar water heating
fuel vehicle refueling property in service in
housing corporation, you are treated as having
2006. You can no longer take a deduction for
property costs, and
paid your proportionate share of any expenses
clean-fuel vehicles or refueling property. For
● $500 for each half kilowatt of capacity of
of such association or corporation. Credits
details, see Form 8910 (Form 8911 for
qualified fuel cell property for which qualified
must be allocated based on the ratio of
alternative fuel vehicle refueling property).
fuel cell property costs are paid.
individual qualified costs to total qualified
Qualified photovoltaic property costs.
Clean Renewable Energy Bond Credit
costs in the case of joint occupancy.
Qualified photovoltaic property costs are costs
Nonbusiness energy property credit. You
You may be able to take a credit based on the
for property which uses solar energy to
may be able to take a credit equal to (a) 10%
face amount of any clean renewable energy
generate electricity for use in a home located
of the amount paid in 2006 for qualified energy
bond you hold during 2006. The amount of any
in the United States and which is used by you
efficiency improvements installed during 2006,
credit claimed must be included as interest
as a home. This includes costs relating to a
plus (b) any residential energy property costs
income. For details, see Form 8912.
solar panel or other property installed as a roof
paid in 2006. However, this credit is limited as
Nonconventional Source Fuel Credit
or a portion of a roof.
You may be able to claim the nonconventional
Qualified solar water heating property
● A total accumulated credit limit of $500 for
source fuel credit for facilities producing coke
costs. Qualified solar water heating property
all tax years.
costs are costs for property to heat water for
or coke gas. Also, the nonconventional source
● A maximum accumulated credit limit of
fuel credit is now a general business credit
use in a home located in the United States and
$200 for windows for all tax years.
subject to the general business credit tax
which is used by you as a home if at least half
● A maximum credit for residential energy
of the energy used by such property for such
liability limits. In general, any 2006 unused
property costs of $50 for any advanced main
purpose is derived from the sun. This includes
credit can be carried forward 20 years. See
air circulating fan; $150 for any qualified
Form 8907 for details.
costs relating to a solar panel or other property
natural gas, propane, or oil furnace or hot
installed as a roof or a portion of a roof. To
Qualified Contributions Expired
water boiler; and $300 for any item of energy
qualify for the credit, the property must be
efficient building property.
You can no longer elect to treat gifts by cash
certified for performance by the nonprofit Solar
or check as qualified contributions on
Qualified energy efficiency
Rating Certification Corporation or a
Schedule A. Qualified contributions for which
improvements. Qualified energy efficiency
comparable entity endorsed by the
you made this election were not subject to the
government of the state in which such
improvements are the following items installed
50% of adjusted gross income limit or the
on or in your main home located in the United
property is installed.
overall limit on itemized deductions.
States if such items are new and can be
Qualified fuel cell property costs.
expected to remain in use for at least 5 years.
Qualified fuel cell property costs are costs for
● Any insulation material or system which is
Pending legislation may eliminate
qualified fuel cell property installed on or in
one or more of the following
specifically or primarily designed to reduce the
connection with your main home located in the
heat loss or gain of a home when installed in
United States. Qualified fuel cell property is an
or on such home.
integrated system comprised of a fuel cell
● Exterior windows (including skylights).
stack assembly and associated balance of
Certain Credits No Longer Allowed
plant components that converts a fuel into
● Exterior doors.
Against Alternative Minimum Tax
electricity using electrochemical means. To
● Any metal roof installed on a home, but only
qualify for the credit, the fuel cell property
if such roof has appropriate pigmented
The credit for child and dependent care
must have a nameplate capacity of at least
coatings which are specifically and primarily
one-half kilowatt of electricity using an
expenses, credit for the elderly or the disabled,
designed to reduce the heat gain of such
education credits, mortgage interest credit,
electrochemical process and an
and carryforwards of the District of Columbia
electricity-only generation efficiency greater
first-time homebuyer credit are no longer
To qualify for the credit, qualified
allowed against AMT and a new tax liability
energy efficiency improvements
Costs allocable to a swimming
limit applies. For most people, this limit is your
pool, hot tub, or any other energy
must meet certain energy
regular tax minus any tentative minimum tax.
storage medium which has a
function other than the function of
AMT Exemption Amount Decreased
Residential energy property costs.
such storage do not qualify for
The AMT exemption amount will decrease to
Residential energy property costs are costs of
the residential energy efficiency credit.
$33,750 ($45,000 if married filing jointly or a
new qualified energy property that is installed
qualifying widow(er); $22,500 if married filing
Earned Income Credit (EIC)
on or in connection with your main home
located in the United States. This includes
You may be able to take the EIC if:
labor costs properly allocable to the onsite
● A child lived with you and you earned less
Expired Tax Benefits
preparation, assembly, or original installation
than $36,348 ($38,348 if married filing jointly),
The following tax benefits have expired and
of the property. Qualified energy property is
will not apply for 2006.
any of the following.
● A child did not live with you and you earned
● Deduction from adjusted gross income for
● Certain electric heat pump water heaters;
less than $12,120 ($14,120 if married filing
electric heat pumps; geothermal heat pumps;
● Tuition and fees deduction.
central air conditioners; and natural gas,
● Deduction for state and local general sales
propane, or oil water heaters.
IRA Deduction Expanded
● Qualified natural gas, propane, or oil furnace
You and your spouse, if filing jointly, may each
or hot water boilers.
● District of Columbia first-time homebuyer
be able to deduct up to $5,000 if age 50 or
● Certain advanced main air circulating fans
older at the end of 2006. You may be able to
credit (for homes purchased after 2005).
take an IRA deduction if you were covered by
used in a natural gas, propane, or oil furnace.
To Figure Your Estimated
a retirement plan and your 2006 modified AGI
To qualify for the credit, qualified
is less than $85,000 if married filing jointly or
energy property must meet
● The 2006 Estimated Tax Worksheet on
certain performance and quality
Standard Mileage Rates
The 2006 rate for business use of your vehicle
● The Instructions for the 2006 Estimated Tax
Residential energy efficient property credit.
cents a mile. The 2006 rate for use of
Worksheet on page 4.
You may be able to take a credit of 30% of
your vehicle to get medical care or move is 18
● The 2006 Tax Rate Schedules on page 5.
your costs of qualified photovoltaic property,
cents a mile. The 2006 rate for charitable use
● Your 2005 tax return and instructions, as a
solar water heating property, and fuel cell
of your vehicle to provide relief related to
property. This includes labor costs properly
guide to figuring your income, deductions, and
Hurricane Katrina is 32 cents a mile. The 2006
allocable to the onsite preparation, assembly,
credits (but be sure to consider the items
rate of 14 cents a mile for other charitable use
or original installation of the property and for
listed under What’s New for 2006 that begins
on page 1).