Refundable credit for residential energy costs

(a)

In general

Subchapter B of chapter 65 of the Internal Revenue Code of 1986 (relating to rules of special application) is amended by adding at the end the following new section:

6433.

Refundable credit for residential energy costs

(a)

General rule

In the case of an individual, there shall be allowed as a credit against the tax imposed by this subtitle for the taxable year an amount equal to the lesser of— (1)33 percent of the amount of the taxpayer’s residential energy costs for such taxable year, or (2)$500. (b)

Income limitation

(1)

In general

The amount allowable as a credit under subsection (a) for any taxable year shall be reduced (but not below zero) by an amount which bears the same ratio to the amount so allowable (determined without regard to this paragraph) as— (A)the amount (if any) by which the taxpayer's adjusted gross income exceeds $50,000 (twice such amount in the case of a joint return), bears to (B)$10,000. (2)

Determination of adjusted gross income

For purposes of paragraph (1), adjusted gross income shall be determined without regard to sections 911, 931, and 933. (c)

Definitions and special rules

For purposes of this section— (1)

Residential energy costs

The term residential energy costs means the amount paid or incurred by the taxpayer during the taxable year— (A)to any utility for electricity or natural gas used in the principal residence of the taxpayer during the heating season, and (B)for any qualified fuel for use in the principal residence of the taxpayer but only if such fuel is the primary fuel for heating such residence. (2)

Principal residence

(A)

In general

The term principal residence has the meaning given to such term by section 121; except that no ownership requirement shall be imposed. (B)

Special rules

Such term shall not include— (i)any residence located outside the United States, and (ii)any residence not used as the taxpayer’s principal place of abode throughout the heating season. (3)

Heating season

The term heating season means October, November, December, January, February, and March. (4)

Qualified fuel

The term qualified fuel includes propane, heating oil, kerosene, wood, and wood pellets. (d)

Other special rules

(1)

Individuals paying on level payment basis

Amounts paid for natural gas under a level payment plan for any period shall be treated as paid for natural gas used during the portion (if any) of the heating season during such period to the extent of the amount charged for natural gas used during such portion of the heating season. A similar rule shall apply to electricity and any qualified fuel. (2)

Homeowners associations, etc

The application of this section to homeowners associations (as defined in section 528(c)(1)) or members of such associations, and tenant-stockholders in cooperative housing corporations (as defined in section 216), shall be allowed by allocation, apportionment, or otherwise, to the individuals paying, directly or indirectly, for the residential energy cost so incurred. (3)

Dollar amount in case of joint occupancy

In the case of a dwelling unit which is the principal residence by 2 or more individuals, the dollar limitation under subsection (a)(2) shall be allocated among such individuals under regulations prescribed by the Secretary. (4)

Treatment as refundable credit

For purposes of this title, the credit allowed by this section shall be treated as a credit allowed under subpart C of part IV of subchapter A of chapter 1 (relating to refundable credits). (e)

Inflation adjustment

(1)

In general

In the case of any taxable year beginning in 2012, each of the dollar amounts contained in subsections (a)(2) and (b)(1)(A) shall be increased by an amount equal to— (A)such dollar amount, multiplied by (B)in the case of— (i)the dollar amount contained in subsection (a)(2), the fuel price inflation adjustment for 2012, and (ii)the dollar amount contained in subsection (b)(1)(A), the cost-of-living adjustment determined under section 1(f)(3) for 2012 by substituting calendar year 2010 for calendar year 1992 in subparagraph (B) thereof. (2)

Fuel price inflation adjustment

For purposes of paragraph (1)(B)(i)— (A)

In general

The fuel price inflation adjustment for 2012 is the percentage (if any) by which— (i)the CPI fuel component for October of 2011, exceeds (ii)the CPI fuel component for October of 2010. (B)

CPI fuel component

The term CPI fuel component means the fuel component of the Consumer Price Index for All Urban Consumers published by the Department of Labor. (3)

Rounding

(A)

Credit amount

(i)

Credit amount

If the dollar amount in subsection (a)(2) (after being increased under paragraph (1)), is not a multiple of $10, such dollar amount shall be rounded to the nearest multiple of $10. (ii)

Income threshold

If the dollar amount in subsection (b)(1)(A) (after being increased under paragraph (1)), is not a multiple of $50, such dollar amount shall be rounded to the next lowest multiple of $50. (f)

Application of section

This section shall apply to residential energy costs paid or incurred after the date of the enactment of this section, in taxable years ending after such date, and before January 1, 2013.

(b)

Conforming amendments

(1)Paragraph (2) of section 1324(b) of title 31, United States Code, is amended by striking or 6431, and inserting 6431, or 6433. (2)The table of sections for subchapter B of chapter 65 of such Code is amended by adding at the end the following new item:

Sec. 6433. Refundable credit for residential energy costs..

(c)

Effective date

The amendments made by this section shall apply to taxable years ending after the date of the enactment of this Act.