Federal Tax Credit

On February 17, 2009 the President signed into law the American Recovery and Reinvestment Act of 2009. As a result of this act, the federal government announced tax credits for consumers who purchase qualifying high -efficiency heating and cooling equipment for their homes.

For a limited time, anyone purchasing a qualifying ENERGY STAR compliant, high efficiency HVAC product in 2010 can receive a tax credit worth 30% of the cost to upgrade, up to a $1,500.00 credit.

It’s a perfect opportunity to upgrade your current heating and cooling equipment.

Minimum Efficiency Required for Tax Credit:

      * Gas Furnace 95% AFUE
      * Air Conditioner 16.0 SEER / 13.0 EER
      * Heat Pumps 15.0 SEER / 12.5 EER / 8.5 HSPF

How The Program Works

As part of an effort to reduce dependence on foreign sources of energy, the ARR Act of 2009 provides a tax credit to help offset the costs of making energy efficiency improvements to your home. Some key details of the program are as follows:

• The tax credits apply to a variety of products (including installation costs) such as windows, doors, heating and cooling
  equipment and more.
   
• The amount of the credit is equal to 30% of the installed cost of the qualifying products up to a total of $1,500.00
   
• If a qualified purchase is not large enough to qualify for the maximum credit of $1,500.00, the remaining available tax
  credit can be claimed for additional qualifying purchases.

The Economic Advantage of Tax Credits

The reason many homeowners are so excited about this program is because tax credits, unlike deductions, are subtracted directly from the total amount you owe on your personal income taxes. For example, if you complete your tax return and calculate that you owe the IRS $2,000.00, a tax credit of $1,500.00 will reduce your tax bill to only $500.00. Of course, be sure to check with your tax advisor on how you can take advantage of the tax credits.