Federal Tax Incentives

Save Today and Tomorrow with Federal Tax Incentives and plottsenergy.com

Federal Tax Incentives

With passage of the American Recovery and Reinvestment Act of 2009, consumers can upgrade to more energy-efficient HVAC equipment and save on their energy bills now, and also save on their taxes next year. The new law makes important changes to existing tax incentives for homeowners who make qualified improvements of higher efficiency HVAC equipment.

Residential Tax Credit Details:

For qualified improvements, homeowners may be able to claim tax credits equal to 30% of the installed costs (up to $1,500).

• Furnace to qualify 95% AFUE
• Boiler to qualify 90% AFUE
• A/C to qualify 16 SEER + 13 EER
• H/P same as A/C plus HSPF 9
• Water Heater energy factor .8 (tankless)

The new tax credits are retroactive to January 1, 2009, and expire on December 31, 2010. The $1,500 limit is for all improvements made during the two year term, not $1500 each year.

Per-Appliance Caps Removed - Homeowners may use the entire $1,500 tax credit limit on a single qualifying improvement. The previous per-appliance caps that limited the homeowner to just $150 for a high efficiency furnace or $300 for a high efficiency central air conditioner or heat pump have been removed.

Lifetime Limit Removed - Homeowners that previously claimed tax credits in 2006 or 2007 are eligible for the full $1,500 limit.

Expanded Geothermal Tax Credits - Homeowners who install geothermal heat pump systems may be able to claim up to 30% of the installed costs in tax credits in the year the system is placed into service. The $2,000 tax credit limit has been removed. The geothermal tax credit has a longer term, from January 1, 2009 and expires December 31, 2016.

Consumers should be aware that the $1,500 limit applies to many types of energy efficient home improvements, including windows and doors, roofing shingles, and insulation. You can use the $1500 on just HVAC improvements or on a combination of above home improvements.