HVAC home improvement tax credits are back by popular demand, or should I say, unpopular demand. In 2005, the Bush administration implemented the federal tax credit for energy efficiency. This tax credit covers a broad spectrum of home improvements, but for the sake of this writing, we are concentrating on the HVAC, home improvement tax credits that allow homeowners to take advantage of direct tax credits for replacing older inefficient heating and air conditioning systems with higher efficiency, Energy Star rated appliances.
The original 2005 program ran through and expired at the end of December, 2007. Home improvements made during 2008 were not eligible for this program, but, in light of the ever increasing economic downturn nearing the close of last year, on October 3, 2008, President Bush signed into law the “Emergency Economic Stabilization Act of 2008.” This bill extended tax credits for energy efficient Home Heating & Cooling System improvements. Tax credits for these residential products, which had expired at the end of 2007, will again be available for improvements made during 2009.
The following Tax Credits available for these HVAC improvements include:
$300 – Split System Air Conditioning – 15 SEER Minimum
$300 – Air Source Heat Pumps – 9 HSPF or 15 SEER Minimum
$150 – Gas, Oil, Propane Furnace or Hot Water Boiler – 95% AFUE Minimum
$ 50 – Advanced Main Air Circulating Fan – less than 2% furnace total energy use
What this means to you the taxpayer, by purchasing. For example, a qualifying air conditioning unit, along with a qualifying gas furnace, where the additional advanced Main Air circulating fan, which in layman’s terms “variable speed drive”, you would qualify for up to a $500 tax credit that you can apply to your 2009 federal income tax filing.
If you’re considering upgrading you’re heating and air-conditioning system, 2009 will be a great year for that, and these additional tax credits will allow you to upgrade your homes energy efficiency. It is important to note, that not all ENERGY STAR qualified homes and products qualify for a tax credit. Tax credits are available for a number of products at the highest efficiency levels, which can cost more than standard products. ENERGY STAR distinguishes energy efficient products which, although they may cost more to purchase than standard models, will pay you back in lower energy bills within a reasonable amount of time, even without a tax credit.
These tax credits are not automatic. You must submit a form that authenticates your specific qualifying brand and model numbers. Your HVAC contractor or supplier should furnish these documents. Qualifying brands and models can be found at the U.S. Government Energy Star Website.