TAX CREDIT


Federal tax credits REVISED for 2011

Tax credits are designed to assist homeowners with improving the energy efficiency of their homes, and a number of air conditioning and heating components and water heaters qualify.

The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (2010 Tax Relief Act) includes a provision to restore the federal tax credit program to pre-Stimulus levels for 2011, including lifetime tax credit limits. Although the American Recovery and Reinvestment Act of 2009 no longer exists, homeowners can still receive up to $500 in federal tax credits through December 31, 2011, subject to caps based on the type of equipment installed.

Under the new law you may qualify for tax credits equal to 10% of the costs of qualifying equipment as follows:

Up to $300 (10% of costs)

  • A split system central air conditioner must be >= 16 SEER and 13 EER. 
  • Package system central air conditioners must be >= 14 SEER and 12 EER
  • Air source heat pump must be >= 15 SEER and 12.5 EER and 8.5 HSPF
  • Package heat pump systems must be >= 14 SEER and 12 EER and 8 HSPF
  • Electric Heat Pump Water Heater – Energy Factor >= 2.0
  • Gas Tankless Whole Home Water Heater – Energy Factor >= 0.82 and thermal efficiency of 90

Up to $150 (10% of costs)

  • Natural gas or propane furnaces AFUE >= 95% 
  • Oil Furnace AFUE >= 95% 
  • Gas, Propane or Oil Hot Water Boiler AFUE >= 95%

Up to $50 (10% of costs)

  • An advanced main air circulating fan which must use no more than 2% of the furnace’s total energy.

Up to 30% of Cost (see www.energystar.gov for more information)

  • Geothermal Heat Pump – Closed Loop – EER 14.1, COP 3.3; Open Loop EER 16.2, COP 3.6; Direct Expansion EER 15, COP 3.5
  • Geothermal and Solar Energy System tax credits are unaffected by the changes and remain in place as is through 12/31/2016.

Federal tax credits under the 2010 Tax Relief Act are only available for improvements made in 2011. Not all equipment will qualify for tax credits. Some products will qualify for federal incentives; some are also eligible for state rebates. Each state’s energy office offers specific information on state tax rebates.

When you choose West Coast Appliance Service, Inc. to install your new energy efficient air conditioning and heating systems or water heater, your West Coast  comfort advisor can show you several options, including systems that could be included in the federal tax credit program. Installing these energy efficient systems can save you money with improved energy efficiency and provide additional savings when you file your taxes. Remember that unlike a deduction, which lowers taxable income, a tax credit reduces the actual tax paid, dollar-for-dollar. But since every taxpayer’s situation is different you should consult with a tax adviser.