Heating, Ventilation And Air Conditioning (HVAC) Tax Credits in 2009 Stimulus
Heating & Cooling Products
Specifically for heating and cooling products, the new law makes important changes to existing tax incentives for homeowners who make qualified improvements of higher efficiency HVAC and water heating equipment to their primary residences.
Coupled with Wisconsin’s Focus On Energy incentives, homeowners have never had a better time to upgrade and replace their air conditioning and heating systems. In addition, many of the major manufacturers of heating and cooling equipment, such as Lennox, are offering spring incentives, such as rebates, to sweeten the pot.
What Qualifies
The $1,500 limit applies to many types of energy efficient home improvements, including heating & cooling equipment. All of these products and projects can qualify for these tax credits.
Primary Residence HVAC; Tax Credit Details
Larger Tax Credit—For qualified improvements homeowners may be able to claim tax credits equal to 30% of the installed costs (up to $1,500). If the 30% is less than $1,500 a homeowner can “bank” the remaining available tax credit for other qualified improvements. Any single installation that costs more than $5000 will instantly reach the $1500 limit.
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 that previously claimed tax credits in 2006 or 2007 are eligible for the full $1,500 limit.
Specific Equipment and Improvements are Qualifications—There is a range of equipment and/or improvements that qualify for the tax credit. It is best to speak with an HVAC professional.
Per-Appliance Caps Removed—Homeowners may use the entire $1,500 tax credit limit on a single qualifying improvement. The previous per-appliance caps that limited the homeowner to just $150 for a high efficiency furnace or $300 for a high efficiency central air conditioner or heat pump have been removed.
Expanded Geothermal Tax Credits—Homeowners who install geothermal heat pump systems may be able to claim up to 30% of the installed costs in tax credits in the year the system is placed into service. The $2,000 tax credit limit has been removed. The geothermal tax credit has a longer term, from January 1, 2009 and expires December 31, 2016.
How To ClaimThe Credit—In the past, the IRS has directed taxpayers to use Form 5695, Residential Energy Efficient Property Credit. Consult your tax professional.
Wisconsin Focus on Energy; Residential Heating & Cooling Rewards
Natural Gas Boiler—Reward Amount: $400 (≤ 300MBH)
Gas Furnace—Reward Amount: $150
Flue Closure—Reward Amount: $75
Air Conditioners SEER 15 or greater or less than 65MBH—Reward Amount: $100
Mini-Split / Ductless Systems—Reward Amount: $100
Ground Source/Geothermal Heat Pumps—Reward amount $250
