On February 17, 2009 the federal government implemented a tax credit (The American Recovery and Reinvestment Act) that provides numerous tax incentives for individuals that invest in energy efficient products for their homes.

How much credit can a homeowner  receive?
Each homeowner can receive up to 30% of the installed cost with a maximum of $1500. Geo-thermal groundsource heat pumps qualify for 30% of the installed cost with no cap.

What are the restrictions?
Improvements must have been placed in service from February 17, 2009 through December 31, 2010.

The credit is a non-refundable tax credit. You must have a tax liability to utilize the credit on your tax return.  In the event that your tax liability is less than your credit, the balance of the credit will NOT be carried forward to next year’s tax return. For example, if you have a $900 tax credit from the purchase of qualifying property, and your tax return shows a $500 tax liability, you may use $500 of the credit to offset your tax liability. Then the remaining $400 will be carried forward to offset 2010 tax liability.

Multiple improvements can be done in 2009 and 2010. The sum of the credits is subject to the maximum tax rebate of $1500. The tax credit for geo-thermal heat pumps are not subject to a cap.

If a homeowner has already made a purchase of other qualifying installed energy saving products, such as windows, doors or insulation, can they still claim another tax credit for the HVAC equipment?
The homeowner is allowed any mix of installations; the $1500 cap still applies with the exception of geo-thermal heat pumps.

If the installation is taking place in the homeowners’ vacation or income property, are they still eligible to claim the tax credit?
The qualifying equipment must be for taxpayer's principal residence, EXCEPT for geothermal heat pumps, solar water heaters, solar panels, and small wind energy systems (where second homes qualify).  The exception is if you have a second home that is rented part of the year, then you can claim the credit (only for the 4 products listed previously) for the portion of time in which you occupy the residence.

How do I submit for the tax credit?
The rebate is termed as a “tax credit”. Homeowners will need to use the federal tax form 5695, the credit amount is then inserted onto form 1040.

The final forms  (5695) and instructions will be available from the federal government in late 2009.

What equipment or products qualify?
The credit applies to improvements such as adding insulation, energy efficient exterior windows and energy efficient heating and A/C systems. 

The heating and A/C systems must meet the following criteria:

·      Furnaces and Boilers: Natural gas & propane furnaces must meet an Annual Fuel Use Efficiency (AFUE) 95 or higher, oil furnaces and gas, oil and propane boilers must meet an AFUE of 90 or better.

·      Split Central Air-Conditioners: Must have both a SEER of at least 16 and an EER of 13 or higher. In most cases an ECM motor is required to achieve these ratings.

·      Split Air Source Heat Pumps: Must have a SEER of at least 15, and EER of at least 12.5 and an HSPF of 8.5 or higher.

Manufacturers’ Certified statement must be provided to qualify. Below is a list of manufacturers websites where you may obtain a print out of their certificates:

Ruud Mfg – http://www.ruudac.com/taxcredit/

Mitsubishi ductless splits -  http://www.mehvac.com/taxcredit/

Slant Fin boilers - http://www.slantfin.com/images/tax_credits.pdf

What other rebates are available?
Currently, there are other incentives available both from manufacturers and local utilities. Check your local Meier Supply branch or utility for additional information.

You can find additional information regarding state and utility rebates here: http://www.dsireusa.org/

IRS website for tax rebates: http://www.irs.gov/newsroom/article/0,,id=204335,00.html

Additional tax rebate information: http://energytaxincentives.org/

***The above is meant for informational purposes only. We recommend you check with your tax advisor prior to making any commitments to your customer.