Qualify Air Conditioners For Energy Tax Credit

The 2009-2010 Energy Tax Credit and You

With the passage of President Obama’s Economic Stimulus Bill, homeowners may be eligible for a tax credit if they purchase certain types of heating, ventilation and air conditioning (HVAC) systems, water heating equipment, or make other energy-related improvements to their homes between January 1, 2009 and December 31, 2010.

Depending on the type of system or product purchased, it is possible to qualify for a tax credit of up to $1,500 on your 2009 or 2010 income tax return. Read on to learn how the government’s new tax credit program works, which Air Conditioning products qualify, and how to apply for a tax credit.

For more information please take a look at our Energy Tax Credit FAQ's in the menu section of this page.

How did the tax credit come about?

On February 17, 2009, President Obama signed the American Recovery and Reinvestment Act (also known as the Economic Stimulus Bill) into law. This legislation combines spending and tax incentives designed to get the American economy moving again by investing in our nation’s roads and energy infrastructure, and by providing incentives for increasing the efficiency and performance of America’s homes and commercial buildings.

Which products are eligible?

Energy Star products that are eligible for HVAC credits.

1. Split system air conditioning efficiency requirements – 16 SEER/13 EER
   (both efficiency levels must be met to qualify for the tax credit).
2. Split system heat pump efficiency requirements – 15 SEER/12.5 EER/8.5 HSPF
   (all three efficiency levels must be met to qualify for the tax credit).
3. Gas furnace qualifying levels – 95% AFUE.
4. Packaged A/C, H/P, or dual fuel products – 14 SEER, 12 EER, 8 HSPF.
5. Maximum tax credit amount - $1500. The legislation specifies 30% of the cost of qualifying equipment, including installation costs, subject to a $1500 maximum per homeowner.
6. The tax credit is effective for all qualified systems installed from 1/1/2009 through 12/31/2010.
7. The tax credit is only valid for taxpayers that own their home and it is used as the principal residence.

How do I apply for a tax credit?

For qualified improvements, homeowners may be able to claim tax credits equal to 30 percent of the installed costs (up to $1,500). The new tax credits are retroactive to January 1, 2009 and expire on December 31, 2010. The $1,500 limit is for all improvements made during the two-year term, rather than $1,500 each year.

The tax credit applies as a direct reduction of taxes owed. In the past, IRS has directed taxpayers to use Form 5695 (the Residential Energy Efficient Property Credit). It is expected that the IRS will produce new rules related to the recently enacted stimulus legislation, giving taxpayers further guidance on claiming tax credits. To fully understand how the new tax credit may apply to you and what you can do to obtain one, you should consult with a tax professional for advice on tax preparation, as this tax credit is subject to IRS regulations.

Legal Disclosures: *Air conditioner and heat pump ratings are based on U.S. government standard tests of the models combined with a matching coil. Efficiency ratings may vary with different coils. Similarly, efficiency ratings may vary when combined with different furnaces. Tax credit certification statements are issued to taxpayers in reliance upon representations made by taxpayer regarding the product purchased and, where applicable, the combination of such product with the proper coil and/or furnance.