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Go Green-Save Green
$1,500 Tax Credits
The
2009 Stimulus Package contains spending and tax
incentives for homeowners to increase the energy
efficiency and performance of their heating and
cooling equipment. Qualified home improvements
of higher efficiency equipment for primary
residences are subject to $1,500 in Federal Tax
Credits.
Residential Tax Credit Details:
Larger Tax Credit:
For qualified home improvements (see
spreadsheet), homeowners can claim tax credits
equal to 30% of the installed costs (up to
$1,500).
Longer Term:
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- not $1,500 each year.
Lifetime Limit Removed:
Homeowners who previously claimed tax credits
for 2006 or 2007 are eligible for the full
$1,500 limit.
Can a homeowner use the entire $1,500 tax credit
for installing a single appliance, such as a
qualified furnace, air conditioner, heat pump,
or hot water heater?
Yes, a homeowner may use the entire $1,500 tax
credit for installing a single, qualified
appliance.
What happens if the 30% of the installed costs
is less than $1,500?
The homeowner can “bank”
the remaining available tax credit for other
qualified improvements.
Any single
installation that costs more than $5,000
instantly reaches the $1,500 limit.
Does the Tax Credit apply to the cost of the
equipment or the equipment plus labor?
The Tax Credit applies to the installed costs of
the qualified equipment- which includes labor.
How do I file?
Use
Form
5695, 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.
Can a homeowner claim the credit for
improvements in a second home?
No, the Tax Credit is only available for
improvements to the taxpayer’s primary
residence.
What is the difference between a Tax Credit and
a Tax Deduction?
A Tax Credit applies
against a taxpayer’s liability.
A Tax Deduction
applies against a taxpayer’s income, lowering
the adjusted gross income and possibly moving
the taxpayer to a lower tax bracket.
Tax credits have a
greater benefit to a taxpayer.
Qualifying Equipment for Tax Credits:
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HVAC
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Central A/C
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Split Systems:
EER >=13
SEER >= 16
Package
systems:
EER >= 12
SEER >= 14
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30% of cost, up to $1,5001
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FAQ on
Central ACs that qualify for the tax
credit
FAQ on Air
Source Heat Pumps that qualify for the
tax credit
Note — not all ENERGY STAR products will
qualify for the tax credit.
View ENERGY
STAR criteria.
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Air Source Heat Pumps
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Split Systems:
HSPF >= 8.5
EER >= 12.5
SEER >= 15
Package
systems:
HSPF >= 8
EER
>= 12
SEER >= 14
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30% of cost, up to $1,5001
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Natural Gas or Propane Furnace
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AFUE >= 95
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30% of cost, up to $1,5001
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FAQ on
Furnaces and Boilers that qualify for
the tax credit
Note — not all ENERGY STAR products will
qualify for the tax credit. View ENERGY
STAR criteria for
furnaces,
boilers.
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Oil Furnace
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AFUE >= 90
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30% of cost, up to $1,5001
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Gas, Propane, or Oil Hot Water Boiler
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AFUE >= 90
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30% of cost, up to $1,5001
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Advanced Main Air Circulating Fan
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No more than 2% of furnace total energy
use.
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30% of cost, up to $1,5001
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Read this
FAQ if the fan qualifies, but the
furnace does not.
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Water Heaters
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Gas, Oil, Propane Water Heater
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Energy Factor >= 0.82
or a thermal
efficiency of at least 90%.
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30% of cost, up to $1,5001
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FAQ on
Water Heaters that qualify for the tax
credit
View ENERGY
STAR criteria for water heaters.
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Electric Heat Pump Water Heater
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Same criteria as ENERGY STAR: Energy
Factor >= 2.0
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30% of cost, up to $1,5001
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