HVAC Tax Credits Revisited

The Bush era tax cuts have been extended along with several tax credits.  Among those extended are the 25C tax credits for HVAC upgrades. In 2010, qualifying heat pump and furnaces were  eligible for a 30%  credit for the first $5000 in upgrades ($1500 maximum). What qualifies? See this link. (Energy Star site.)

In 2011, this credit rolls back to the 2008 levels. Here’s a summary (hat tip to ACCA Insider):

For 2011, eligible taxpayers would be able to claim up to $500 in tax credits for installing energy efficient equipment, but the most a taxpayer could claim for a qualifying central air conditioner or heat pump would be $300, $150 for a qualifying furnace, and $50 for a qualifying advanced main circulating fan.

The tax extender package reinstates the lifetime credit caps, which disqualify any homeowner who has claimed more than $500 in 25c tax credits since January 1, 2005, from any further credits.

The tax extender package also modifies some of the minimum standards to qualify for the tax credit. The qualifying guidelines for natural gas and propane hot water boilers, and oil furnaces and hot water boilers are increased to 95% AFUE. Changes to the qualifying standards for central air conditioners, and heat pumps in effect in 2009 and 2010 remain the same for 2011.

The short version: If you waited until 2011, you may still be eligible for $500 in credits if you haven’t claimed the credit since 2005.



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