FREQUENTLY ASKED QUESTIONS ON THE 2009 AND 2010 FEDERAL TAX CREDITS FOR ENERGY EFFICIENT RESIDENTIAL HVAC EQUIPMENT

On February 17, 2009, President Obama signed the “American Recovery and Reinvestment Act of 2009 (ARRA)” into law. This bill combines spending and tax incentives designed to get the American economy moving forward by investing in infrastructure and increasing the energy efficiency of residential/commercial buildings in America.

Specifically for the HVAC business, this legislation makes a number of important changes to the existing tax incentives for homeowners who make qualified improvements on high efficiency HVAC products and equipment in their primary residences. Overall, the tax credits available have been increased up to 30% of the installed cost of those improvements, or up to a total of $1,500 for residential HVAC products installed from January 1, 2009 through December 31, 2010.

The following information has been prepared to help answer those frequently asked questions on this complicated issue of tax credits for residential HVAC equipment. Before filling for tax credits on any of the listed models, it is always recommended that homeowners/taxpayers consult with a tax professional to review the provisions of the “American Recovery and Revitalization Act of 2009” (ARRA) and application in reference to Section 25C of the Internal Revenue Code. Previously, the IRS has directed taxpayers to use Form 5695, Residential Energy Efficient Property Credit.

Taxpayers should keep copies of invoices and receipts for documenting their actual expenditures, but only need to file Form 5695 with their tax returns to get the tax credits.

Frequently Asked Questions Concerning the Revised Residential HVAC Tax Credits for 2009 and 2010