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Stimulus Tax Credit Information

Take advantage of a stimulus tax credit when purchasing your next energy efficient AC system!

Stimulus Plan Overview

On February 17, 2009, President Obama signed into law the American Recovery and Reinvestment Act of 2009. As a result of this Act, American taxpayers can receive tax credits of up to $1,500 to help offset the costs of certain qualified energy property expenditures in 2009 and 2010. These qualified expenditures include various models of Heating, Ventilation, and Air Conditioning (HVAC) equipment that fall into the following categories:

 

  • Gas furnaces with an AFUE rating of 95 or higher
  • Split air conditioners with efficiency ratings of 16 SEER/13 EER or higher
  • Split heat pumps with efficiency ratings of 15 SEER/12.5 EER/8.5 HSPF or higher
  • Packaged air conditioners with efficiency ratings of 14 SEER/12 EER or higher
  • Packaged heat pumps with efficiency ratings of 14 SEER/12 EER/8 HSPF or higher

 

Products meeting the above requirements will be eligible for a tax credit equal to 30% of installed cost to a maximum $1500 tax credit (applicable to taxes filed for the year of installation). Central Texas Air offers product applications and product combinations that meet these requirements. Check ARI and GAMA ratings to confirm that the products, application and combination you are installing meet the above prescribed requirements.

 


Stimulus Tax Credit Frequently Asked Questions

Can I claim $1,500 in tax credits for improvements made in 2009 and again for improvements made in 2010?
No. You are only eligible for a total of $1,500 in tax credits for qualifying improvements made in the combined two year period of 2009 and 2010.

 

Can I claim the entire $1,500 credit for the installation of one appliance?
Yes. You may use the entire $1,500 tax credit for installing a single qualified appliance, such as a qualified furnace, air conditioner or heat pump, if the install cost is at least $5,000. If you replaced multiple appliances at the primary residence (i.e. two air conditioning systems, etc), the maximum credit would still be $1,500.

 

What happens if my purchase is not large enough to qualify for the maximum credit of $1,500? Is the remaining credit still available for future purchases?
You can claim the remaining available tax credit if you purchase additional qualified improvements for installation before December 31, 2010. Any single qualifying installation that costs more than $5,000 will reach the $1,500 tax credit limit.

 

Does the tax credit apply to the cost of the equipment only or does the cost of installation labor qualify for the credit too?
The tax credit applies to the installed costs of the qualified equipment, which includes labor costs properly allocable to the installation of the qualifying equipment.

 

How can I claim the credit and receive my money?
The IRS has directed taxpayers to use Form 5695 Version 2009 (expected to be available towards the end of 2009), Residential Energy Efficient Property Credit.
Taxpayers are not required to file anything more than the form, but are instructed to keep records of their installation.


What’s the difference between a tax credit and a tax deduction?
A tax credit is a direct reduction of your tax liability. A tax deduction is a reduction of your taxable income, on which the tax liability is calculated. Tax credits provide a greater benefit to you the taxpayer.

 

What if I already claimed $500 in tax credits in 2006 or 2007?
The “lifetime caps” that used to be in place have been removed. Any previous claims for equipment installed before 2009 do not count against the current $1,500 tax credit limit.

 

Can I claim the credit for improvements to a second home?
No. The tax credit is only available for improvement to your primary residence.

 

Can my small business that operates out of a townhouse and installs residential equipment in a commercial setting claim the credit?
No. The tax credit may only be claimed by taxpayers on their personal income taxes for improvements to their primary residence.

 

What other types of energy efficiency improvements qualify for the tax credits?
You may be able to qualify for the tax credits if you make qualified improvements to: windows and doors including skylights, storm windows and storm doors; roofing including metal and asphalt roofs; and insulation. All of these improvements qualify, but you may only claim $1,500 in total for all improvements (except geothermal, for which there is no cap).

 


NOTE: Please remember to consult your tax adviser for specific questions related to the tax credits. Central Texas Air is merely posting this for informational purposes, as every taxpayer’s situation is different.