THE AMERICAN RECOVERY AND REINVE

THE AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009

FEDERAL TAX CREDITS

On February 17, 2009, President Obama signed a stimulus bill (The American Recovery and Reinvestment Act of 2009) that made some significant changes to the energy efficiency tax credits.

Tax Credits for Homeowners

The efficiency levels have been modified to reflect the highest tier of the CEE high-efficiency specifications for Residential HVAC systems for equipment "placed in service" between February 17, 2009 to December 31, 2010. Please note: equipment must meet all performance specifications for its category. For example, a tax credit-eligible central air conditioner must have stated performance ratings of 13 EER and 16 SEER.
The tax credit has been raised from 10% to 30% for certain products.
The tax credits that were for a specific dollar amount ($300 for CAC), have been converted to 30% of the cost.
The maximum credit has been raised from $500 to $1500 for the two years (2009-2010). However, some improvements such as geothermal heat pumps, solar water heaters, and solar panels are not subject to the $1500 maximum.
The tax credits that were previously effective for 2009, have been extended to 2010 as well.

PRODUCT TYPE	TAX CREDIT SPECIFICATION		TAX CREDIT	EFFECTIVE DATE	HOW TO OBTAIN
Central A/C	Split: EER >=13 SEER >=16	Packaged: EER >=12 SEER >=14	The tax credit is for 30% of the cost of the system¹	February 17, 2009 – December 31, 2010	IRS Form 5695³
Air Source Heat Pump	Split: HSPF >=8.5 EER >=12.5 SEER >=15	Packaged: HSPF >=8 EER >=12 SEER >=14	The tax credit is for 30% of the cost of the system¹	February 17, 2009 – December 31, 2010	IRS Form 5695³
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	The tax credit is for 30% of the cost of the system²	February 17, 2009 – December 31, 2010	IRS Form 5695³
Gas, Oil, Propane Furnace or Hot Water Boiler	Furnaces (AFUE): Gas >=95% Oil >= 90% Propane >=90%	Boiler: AFUE >=90	The tax credit is for 30% of the cost of the system¹	February 17, 2009 – December 31, 2010	IRS Form 5695³
Advanced Main Air Circulating Fan	No more than 2% of furnace total energy use		The tax credit is for 30% of the cost of the system¹	February 17, 2009 – December 31, 2010	IRS Form 5695³
Gas, Oil, Propane Water Heater	Energy Factor >= 0.82 Or Thermal Efficiency >=0.90		The tax credit is for 30% of the cost of the system¹	February 17, 2009 – December 31, 2010	IRS Form 5695³
Electric Heat Pump Water Heater	Energy Factor >=2.0		The tax credit is for 30% of the cost of the system¹	February 17, 2009 – December 31, 2010	IRS Form 5695³

¹ Subject to a $1,500 maximum cap per homeowner for all combined improvements made in 2009 and 2010.

² This credit is not limited to the $1,500 home improvement cap footnoted above.

³ A Manufacturer’s Certification is a signed statement from the manufacturer certifying that the product or component qualifies for the tax credit. Taxpayers must keep a copy of the certification statement for their records, but do not have to submit a copy with their return.