Federal Tax Credit
How do the 2009 Federal Tax Credits Affect Me?
On February 17, 2009 President Barrack Obama signed into law the American Economic Recovery Act (ARRA) which is intended to provide stimulus in the wake of the recent economic downturn. This $787 billion Federal Stimulus package offers consumers a unique opportunity to replace old, inefficient Heating , Cooling and Plumbing systems and in the process reduce energy output, help the environment, improve home comfort and receive a 30% tax credit.
Under the ARRA, homeowners can claim up to 30% (up to a $1500 limit) for the installation of higher efficiency furnaces, boilers, air source heat pumps, central air conditioners, and hot water heaters in the tax years, 2009-2010. The previous tax credits were limited to $300 for central air conditioners and $150 for furnaces and boilers, now homeowners may use the entire $1,500 tax credit limit on a single qualifying improvement.
Residential Tax Credit Details:
- Larger Tax Credit
Homeowners may be able to claim tax credits equal to 30% of the installed costs (up to $1,500) on qualified improvements. - Longer Term
The new tax credits are retroactive to January 1, 2009, and will expire on December 31, 2010. The $1,500 limit is not $1,500 each year, but for all improvements made during the two-year term. - Per-Appliance Caps Removed
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 $300 for a high efficiency central air conditioner or heat pump or $150 for a high efficiency furnace have been removed. - Lifetime Limit Removed
Homeowners that previously claimed tax credits in 2006 or 2007 are eligible for the full $1,500 limit.