2011 Federal Tax Credits

Federal Tax Credit Qualifying Residential Air Conditioning and Heating Systems

The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 provides for federal tax credits on qualifying, high-efficiency residential heating and cooling products and systems (HVAC) through December 31, 2011.

This program is similar to, but different from, the federal tax credits that were in effect during 2009 and 2010.

The maximum amount an eligible homeowner may receive in federal tax credits for purchasing and installing qualifying products, whether those purchases are in the form of upgraded insulation, windows, HVAC equipment or other eligible improvements, is now 10% of the cost of the improvement, including installation costs, up to $500 (with maximum per-category amounts listed below).

The $500 tax credit amount is reduced by the total amount of residential air conditioning or heating energy property credits a homeowner has claimed for purchases between 2006 and 2010. If a homeowner has already claimed single-family home tax credits of $500 or more from improvements made prior to 2011, he or she cannot claim any new tax credits during 2011.

All furnaces and boilers, whether fueled by natural gas, propane or fuel oil, must have an AFUE rating of 95% or higher to be eligible for the 2011 federal tax credit program.

Products such as air conditioning and heating units, must be installed between January 1, 2011, and December 31, 2011, to be eligible for tax credits.

This information is provided for discussion purposes only and is provided as a generic guideline. No consideration should be taken that this information represents tax advice. Contact your local tax professional to determine how these credits may apply to your circumstances and visit www.energystar.gov for more information.