Finding Production Tax Credit For Your Business

The production tax credit both encourages manufacturers to go green in order to save money, and helps contribute to a decline in manufacturing pollution. Businesses that seek this tax credit can save paying taxes on as much as 2.1 cents per kilowatt hour of produced renewable energy.

What Is the Production Tax Credit?

The production tax credit was enacted by Congress to encourage businesses to rely on renewable energy sources. Any business that makes approved environmentally-friendly improvements to their businesses by 2013 can qualify.

Step 1 - Decide on Your Method of Renewable Energy

The most popular form of renewable energy for businesses seeking this tax credit is wind energy, which offers the maximum tax credit. Other renewable energy sources include:
  • Geothermal, "closed loop" bioenergy, hydroenergy, and solar energy;
  • "Open-loop" biomass, incremental hydropower, landfill gas, small irrigation systems, and municipal solid waste (for a smaller tax credit)
Step 2 - Maximizing Your Tax Credit

Congress included added tax incentives for businesses and manufactures that:
  • invest in more efficient energy technology for their business buildings, such as energy-efficient biofuel stoves and energy-efficient building improvements;
  • produce energy-efficient appliances to sell
  • construct energy-efficient buildings and homes.
Step 3 - Determining Your Maximum Tax Credit

Rather than hiring an accounting firm to complete your business' taxes, hire a tax credit service, which employs accountants, lawyers, and IT specialists. These services determine your business' maximum Federal and State Credits, including Federal and State Renewable Energy Tax Credits.