Question: How has the new Stimulus bill affected the tax credits for energy efficient home improvements?

On February 17, 2009, President Obama signed the "Stimulus Bill" (The American Recovery and Reinvestment Act of 2009) that made significant changes to the energy efficiency tax credits. These changes apply to products " placed in service" in 2009. The highlights are:

• The tax credits that were previously effective for 2009, have been extended to 2010 as well.
• The tax credit has been raised from 10% to 30%.
• The tax credits that were for a specific dollar amount (ex $300 for a CAC), have been converted to 30% of the cost.
• The maximum credit has been raised from $500 to $1,500 total for the two year period (2009-2010). However, some improvements such as geothermal heat pumps, solar water heaters, and solar panels are not subject to the $1,500 maximum.
• The $200 cap on windows has been removed, but the requirements for windows (after June 1, 2009) has been increased significantly. Not all ENERGY STAR qualified windows will qualify after June 1, 2009.

Question: Is there a tax credit for central air conditioners?

Central air conditioners that meet the following requirements qualify for a tax credit of 30% of the cost (including installation), up to $1,500 in 2009 and 2010:

Split Systems:       SEER >= 16 & EER >=13
Package systems: SEER >= 14 & EER >= 12
The best way to find Central ACs that are eligible for the tax credit is to ask your HVAC contractor for a list of products that are both eligible and properly sized for your home. We recommend you ask your HVAC contractor to determine the proper size of your HVAC equipment using an engineering procedure such as "Manual J." (Read this FAQ on proper sizing.)

To verify tax credit eligibility, ask your HVAC contractor to provide the Manufacturer's Certification Statement for the equipment you plan to purchase. Or search on the Manufacturer's website.

A user-friendly list of all tax credit eligible Central Air Conditioners does not exist. There are two partial lists designed for HVAC professionals which we do not recommend for consumers. If you really want to view the lists, read this FAQ.

Also save your receipts and the Manufacturer's Certification Statement for your records. A Manufacturer’s Certification Statement is a signed statement from the manufacturer certifying that the product or component qualifies for the tax credit. The IRS encourages manufacturers to provide these Certifications on their website to facilitate identification of qualified products.

More information on tax credits: energystar.gov/taxcredits

Installation costs ARE COVERED for:

• HVAC (Heating, Ventilation and Air Conditioning) systems
• Biomass Stoves
• Water Heaters (including solar)
• Solar Panels
• Geothermal Heat Pumps
• Wind Energy Systems
• Fuel Cells

The tax credit for HVAC, biomass stoves, and non-solar water heaters is 30% of the total cost (product + installation) up to $1,500. The law specifies installation costs include: "expenditures for labor costs properly allocable to the onsite preparation, assembly, or original installation of the property."