Income Tax Subtraction for Energy-Efficient Residences

Summary

This incentive is not applicable to homes constructed after December 31, 2010. Arizona provides an individual income tax subtraction to taxpayers who sell one or more energy efficient single family residences, condominiums or town houses. The credit may be claimed in the year that the house is sold. It is equal to 5% of the sales price excluding commissions, taxes, interest, points, and other brokerage, finance and escrow charges and cannot exceed $5,000. Energy efficient residences include new single family-residences, condominiums, or town houses that exceed the 1995 Model Energy Code Threshold by at least 50% (90 points) as determined by an approved rating program. The subtraction is valid for taxable years beginning after December 31, 2001 and ending before December 31, 2010. The taxpayer may elect to transfer a subtraction under this section to the purchaser of the residence or to the financial institution that secures a mortgage or deed of trust on the residence. To complete the transfer, the taxpayer must prepare a written statement that the taxpayer has elected not to claim the subtraction and that the purchaser or financial institution may claim the subtraction Instructions for receiving the subtraction can be found in the instructions for Form 140, available under “Forms and Instructions” at www.revenue.state.az.us.