 On February 17, 2009, President Obama signed into law "H.R. 1, the American Recovery and Reinvestment Act of 2009." This act has significant impact on the residential HVAC Tax Credits that the industry has been aiming at in 2009.
- New Tax Credit Efficiency Requirements. The new law changes the HVAC tax credit efficiency requirements for Split System Air Conditioners, Split System Heat Pumps, and Packaged Heat Pumps. Refer to summary table below.
- New Tax Credit Dollar Values. The dollar vale of the tax credits has changed significantly. Instead of fixed dollar values ($300, $150, $50), the credit is now defined as 30% of the installed cost of qualifying equipment, up to $1,500 maximum over both years 2009 and 2010.
- New Dates. The new credits are available for qualifying products that are "placed in service" between January 1, 2009 and December 31, 2010.
- Higher Tax Credit. The tax credit has increased from specific dollar amounts - $300, $150, $50 -to 30% of installed cost of qualifying equipment with maximum credit of $1,500.
- More Air Condition Services Split-System Heat Pumps Qualify. New minimum efficiency requirements for split-system heat pumps allow MORE split-system heat pump combinations to qualify.
- Many Air Condition Services Small Package Heat Pumps Qualify. New minimum efficiency requirements allow many small packaged heat pumps to qualify.
- Split-System Air Conditioner requirements are tougher. More qualifying combinations are coming soon.
- Small Package Gas/Electric Models. The act is not clear on whether they qualify and if so, how the credit would be calculated. We are seeking IRS guidance on this point
You don't receive an income tax credit when you buy the product, like an instant rebate. You claim the credit on your federal income tax from at the end of the year. The credit then increases the tax refund you receive or decreases the amount you have to pay.
Now is a great time to upgrade from R-22 to 410-A with the mandates on R-22 at year end. We challenge you to take advantage of the $1,500 tax credit to help defer the cost of your new system.
For example, lets use $5,000 price for a new system:
$5,000 - 3 ton 15 SEER heat pump
$1,500 - tax credit
-
2,100 - utility savings for 5 years @ $420 per year
$1,400 cost after 5 years
$1,400 @ 60 months = $23.00 per month
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