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Stimulus Center

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

Stimulus Plan Overview

Part of the tax extender bill passed by Congress in December 2010 made significant changes to tax incentives for federal taxpayers who install qualified energy efficient retrofits in their home, including higher efficiency heating, ventilation, and air conditioning (HVAC) equipment in their primary residences. An eligible taxpayer may claim up to $500 in tax credits, subject to caps based on the type of equipment installed.

You may now qualify for tax credits equal to 10% of the costs (up to a $300 limit) for installing a high efficiency central air conditioner, heat pump, or hot water heater. You may also qualify for tax credits equal to 10% of the costs (up to $150 limit) for installing a qualified furnace or hot water boiler. A smaller tax credit of 10% of the installed costs (up to $50 limit) is available for installing a system with an advanced main air circulating fan.

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

For the advanced main air circulating fan credit, the fan must use no more than 2% of the furnace’s total energy. If the fan is qualified, but the furnace is not, you will not be able to take 10% off the cost of the entire furnace. You can get a 10% tax credit on the cost of the fan alone. If the furnace is qualified, but the fan is not, you can still take the 10% tax credit on the full cost of the furnace.

ExpressOverstock.com 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

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?
File IRS Form 5695 with the rest of your tax forms in 2012.

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.

If I claimed more than $500 in tax credits under the previous tax credit programs, am I still eligible?
No. The new law reinstates the lifetime tax credit limits, which disqualify any homeowner who has claimed more than $500 in 25c tax credits since January 1, 2005, from any further credits.

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 $500 in total for all improvements.

Why You Should Consider an Upgrade
Advances in technology over the last ten years mean that today’s higher efficiency HVAC equipment uses less energy, runs more quietly, and provides improved indoor  air quality and comfort. And by using less energy and improved refrigerants, your new HVAC equipment is better for the environment.

Most homeowners would like to reduce their energy bills with higher efficiency HVAC equipment, and these tax credit help make the initial investment more affordable.

NOTE: Please remember to consult your tax adviser for specific questions related to the tax credits. We can’t guarantee eligibility for the tax credits.
Expressoverstock.com is merely posting this for informational purposes, as every taxpayer’s situation is different. Source: acca.org