SECTION 2. BACKGROUND

Section 25C allows a credit in an amount equal to the sum of (1) 10 percent of the amount paid or incurred by the taxpayer for qualified energy efficiency improvements installed during the year, and (2) the amount of the residential energy property expenditures paid or incurred by the taxpayer during the year. ¹

The credit is allowed for qualifying property placed in service through December 31, 2013. ²

Section 25D allows a credit for qualified expenditures made by a taxpayer for residential energy efficient property. Taxpayers may claim the § 25D credit for qualified property placed in service before January 1, 2017.

On May 11, 2009, the Internal Revenue Service (the Service) issued Notice 2009–41, 2009–19 I.R.B. 933, to provide procedures that manufacturers may follow to certify that property satisfies certain conditions of § 25D. The notice defines

qualified expenditures for residential en- ergy efficient property based on the definitions in § 25D(d).

On June 22, 2009, the Service issued Notice 2009–53, 2009–25 I.R.B. 1095, to provide procedures that manufacturers may follow to certify property as being eligible for the credit under § 25C. The notice defines the terms qualified energy efficiency improvements and residential energy property expenditures based on their respective definitions in § 25C(c) and (d) as in effect at that time. The 2010 Act subsequently modified those definitions, however, by updating certain efficiency standards and making other changes. As a result of those modifications, for properties placed in service in 2011, 2012, and 2013, taxpayers must rely on the definitions provided in § 25C(c) and (d) as amended by the 2010 Act.

Both Notice 2009–41 and Notice 2009–53 provide guidance to taxpayers seeking to claim credits under §§ 25C and 25D in reliance on a manufacturer’s certification. The notices provide that for either credit, a taxpayer may rely on a manufacturer’s certification that property is eligible for the credit so long as the Service has not withdrawn the manufacturer’s right to make the certification. The notices further clarify that the Service may determine that a manufacturer’s certification is erroneous; in such cases, the Service will withdraw a manufacturer’s right to provide a certification on which future purchasers of the component or property may rely, and taxpayers purchasing the component or property after the date on which the Service publishes an announcement of the withdrawal may not rely on the manufacturer’s certification.