Tax Credits for Air Conditioning and Heating

You could qualify for up to $1500 in federal tax credits for making qualifying energy efficiency improvements to your home.

By now you have probably heard about the “stimulus package” that became law in February 2009. It is officially called The American Recovery and Reinvestment Act of 2009 (ARRA) and there is potentially $1500 in tax credits in it for you.

$1500 Stimulus Tax Credit Facts for Air Conditioning, Heating, Boilers or Water Heaters:

You may qualify for a tax credit of 30% (up to $1500) of the installed cost of qualifying energy efficient air conditioning equipment, heating equipment, boilers, hot water heaters or other home improvements.

The installation must be for your existing home (not new construction).

The installation must be to your primary residence (no second homes, rental properties or commercial buildings).

You may receive the whole credit from one qualifying purchase of $5,000 or more or a partial credit of 30% of any lower priced qualifying purchase.

The qualifying item(s) must be placed in service between January 1, 2009 and December 31, 2009 to claim the credit in 2009 or between January 1, 2010 and December 31, 2010 to claim the credit in 2010.

Although the tax credit is available in both 2009 and 2010, the total amount you can claim in either year or in a combination of both years is $1500 for all qualifying home improvements.

Even if you took advantage of the $500 tax credit in prior years, you can still claim this one for new qualifying purchases made between January 1, 2009 and December 31, 2010.

The tax credit is calculated on the full installed cost (not just the equipment).

It is easy to file for the credit, which includes filing the IRS Form 5695 for the qualifying year with your personal income tax return. We will provide the Manufacturer Certification Statement to you.

There is no stated income phase-out for this particular tax credit at this time. However, you should consult with your tax professional for any tax credit. This is especially true if you may fall under the AMT rules.

The definition of “qualifying equipment” has changed since the old tax credit was in

place but we offer a multitude of options that would allow you to qualify for the credit.