Federal Energy Tax Credit Guide for HVAC

The Federal Energy Tax Credit for qualified heating and air conditioning systems, allows homeowners to claim tax credits equal to 30% of the installed costs (up to $1,500) of the higher efficiency HVAC equipment. The energy tax credits are retroactive back to Jan 1, 2009, but they do expire on Dec 31, 2010! The limit of $1,500 is for all hvac related improvements completed during the two year term, and not $1500 each year.

Furnace and Air Conditioner Tax Credit Notes

• 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.
• Homeowners that previously claimed tax credits in 2006 or 2007 are eligible for the full $1,500 limit.
• The $2,000 Geothermal tax credit limit has been removed and the geothermal credit has a longer term, from January 1, 2009 to December 31, 2016.
• You can use the $1500 on just HVAC improvements or on a combination of several home efficiency improvements.

Geothermal Tax Credit

Geothermal heat pumps (aka Ground source) are very much like air source heat pumps, but use the heat from the ground instead of outside air to heat the space, cool the space with air conditioning and, in most cases deliver hot water. Because they use naturally created heat from within the earth, they are one of the highest efficient and most comfortable heating cooling technologies available.

• Geothermal Tax Credit:  30% of cost with no upper limit
• Tax Credit Expires:  December 31, 2016
• Geothermal Credit Details: Existing homes & new construction qualify. Both principal residences and second homes qualify. Rentals do not qualify.

Furnace Tax Credit

• To qualify for the furnace tax credit, 95% AFUE
• 80% AFUE Furnace with Advanced Air Circulating Fan may quality
• Boilers must meet 90% AFUE to qualify for the furnace tax credit

Air Conditioner Tax Credit

• Central Air Conditioner must meet a minimum of 16 SEER, 13 EER
• Heat Pump units are the same as Air Conditioner Tax Credit, but must also meet HSPF 9
• Read more at the air conditioner tax credits page

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You can learn more about the Federal Energy Tax Credits at the energy star website.

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