Q: Is there a Federal or State credit for central air conditioners or heat pump systems?
A: Central air conditioners that meet certain energy efficiency ratios qualify for a tax credit of 30% of the cost (including installation), up to $1,500 in 2009 and 2010.
Heat pumps that meet certain performance requirements qualify for a tax credit of 30% of the cost (including installation), up to $1,500.
The best way to find central ACs and heat pumps that are eligible for the tax credit is to ask your Climatech representative for a list of products that are both eligible and properly sized for your home.
Q: Is there a tax credit for furnaces?
A: Furnaces and boilers that meet the certain Annual Fuel Utilization Efficiency requirements (AFUE) qualify for a tax credit of 30% of the cost (plus installation) up to $1,500 in 2009 and 2010.
The best way to find furnaces and boilers that are eligible for the tax credit is to ask your Climatech representative for a list of products that are both eligible and properly sized for your home.
Q: How do I apply for the energy credits?
A: To claim the tax credit for energy efficient products placed in service (ready and available for use) in 2009, you will need to file the 2009 IRS Form 5695 and submit it with your 2009 taxes (by April 15, 2010).
Also save your receipts and the Manufacturer’s Certification Statement for your records. A Manufacturers Certification Statement is a signed statement from the manufacturer certifying that the product or component qualifies for the tax credit. The IRS encourages manufacturers to provide these Certifications on their website to facilitate identification of qualified products.
Q: Is there an income limit on the tax credit?
A: There is no upper or lower limit on income for the energy efficient tax credits.
However, these energy efficiency tax credits are technically “non-refundable” which means you can’t get more money back in tax credits than you pay in federal income taxes (check your W2 or last year’s tax return to get a sense for how much federal income tax you pay). You can claim the entire credit as long as the total amount of federal income tax that you owe, minus your deductions, is more than the total amount of all non-refundable tax credits that you are claiming.
Q: Is the $1,500 tax credit for each product? Each year? Each person?
A: Even if you purchase multiple products you can only get a maximum of $1,500 over the 2-year period (2009 & 2010). Basically you can spend up to $5,000 during this 2-year period on a single or multiple products, and get 30% or $1,500 (30% of $5,000 = $1,500) back as a tax credit. If you get the entire $1,500 credit in 2009, then you can’t get anything additional in 2010.
Two or more unmarried people living in the same home who own it jointly are each eligible for the tax credit on the amount of money they each individually spend to make home improvements. Example: Person A buys windows for $5,000, and gets the entire $1,500 (30% of $5,000 = $1,500) tax credit, Person B buys a central air conditioner for $3,000 and gets back $900 (30% of $3,000 = $900).
Q: I am building my own home. Do I qualify for any of the tax credits?
A 30% tax credit (including labor and installation), with no upper limit, is available for consumers building new homes (through 2016) for:
- Photovoltaics
- Solar Water Heaters
- Geothermal Heat Pumps
- Small Wind Energy Systems
- Fuel Cells (up to $500 per .5 kW of power capacity)
To qualify for the fuel cell credit, the new home you are building must be planned as your principle residence. The credit for photovoltaic, solar water heaters, geothermal heat pumps, and small wind energy systems does not have to be for your principal residence; so, rental units, second homes, etc… are all eligible. See the Instructions attached to 2008 IRS Form 5695 to help you further with this provision.
There is a $2,000 tax credit for building a new energy efficient home, but it is ONLY available to “eligible contractors”; therefore, owner/builders may not receive the builder tax credit unless employed as eligible contractors.
For more information:
More information on tax credits: energystar.gov/taxcredits
Tax credits are being administered by the IRS (www.irs.gov/contact).
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