With the passage of President Obama's Economic Stimulus Bill, homeowners may be eligible for a tax credit if they purchase certain types of heating, ventilation and air conditioning (HVAC) systems, water heating equipment, or make other energy-related improvements to their homes between January 1, 2009 and December 31, 2011. As a leader in producing energy-efficient home comfort solutions, Trane offers many products that are eligible under this new law. Depending on the type of system or product purchased, it is possible to qualify for a tax credit of up to $1,500 on your 2009 or 2010 income tax return or up to $500** on your 2011 income tax return. Read on to learn how the government's new tax credit program works, how to apply for a tax credit, and find out which Trane products or systems are eligible.
On February 17, 2009, President Obama signed the American Recovery and Reinvestment Act (also known as the Economic Stimulus Bill) into law. This legislation combines spending and tax incentives designed to get the American economy moving again by investing in our nation's roads and energy infrastructure, and by providing incentives for increasing the efficiency and performance of America's homes and commercial buildings. As a part of the recently passed tax bill, Congress modified and extended its energy efficiency tax credits for appliances, new homes and retrofits to existing homes, which includes the 25C heating and cooling equipment tax incentive for another year. The new bill extends eligibility to the end of 2011, but reduces the incentive to a $500** maximum tax credit.
For qualified improvements, homeowners may be able to claim tax credits equal to 10 percent of the installed costs (up to $500 maximum**). The extended tax credit is in effect for all qualifying systems and products installed during the 2011 calendar year and expires on December 31, 2011. The tax credit applies as a direct reduction of taxes owed. In the past, IRS has directed taxpayers to use Form 5695 (the Residential Energy Efficient Property Credit). It is expected that the IRS will produce new rules related to the recently enacted stimulus legislation, giving taxpayers further guidance on claiming tax credits. To fully understand how the new tax credit may apply to you and what you can do to obtain one, you should consult with a tax professional. Subject to IRS regulations. Customers should consult a tax professional for advice on tax preparation. Qualified products or systems installed during 2009 and 2010 may also qualify for a tax credit equal to 30 percent of the installed costs (up to $1,500).
Most of the HVAC qualifying efficiency levels have remained the same. The only exceptions are boilers and oil furnaces, where the qualifying efficiency has been increased from 90 AFUE to 95 AFUE. The following chart summarizes the differences between the 2009-2010 tax credits and the newly passed 2011 tax credits. Changes in the 2011 tax credits are highlighted in red:
We advise homeowners to consult with a certified tax advisor to ensure they qualify for the tax credit. The new tax credit extension is in effect for all qualifying systems and products installed in the 2011 calendar year
We are committed to providing your family with a system that is tailored to your specific needs. One of our comfort specialists would be happy to help you determine the right products for your home.
1 Potential energy reduction comparing an 8-SEER system to a 20-SEER system. Actual energy savings vary based on lifestyle, system settings, maintenance, climate and installation
*To download and print the government's summary of Energy Star products that are eligible for HVAC credits for homeowners, visit www.energystar.gov/taxcredit.
**$300 maximum for a qualifying air conditioning system, heat pump or packaged system, $150 maximum for a qualifying furnace, and $50 maximum for a qualifying product with an advanced circulating fan.