As much as that was true and good news for taxpayers, the news has gotten much better.
On February 17, 2009, with the signing of the "Stimulus Bill" (The American Recovery and Reinvestment Act of 2009),significant changes to the energy efficiency tax credits were made.
These changes apply to products "placed in service" in 2009.
Highlights include: oThe tax credits that were previously effective for 2009, have been extended to 2010 as well.
oThe tax credit has been raised from 10% to 30%.
oThe tax credits that were for a specific dollar amount (ex $300 for a CAC), have been converted to 30% of the cost.
oThe maximum credit has been raised from $500 to $1,500 total for the two year period (2009-2010).
However, some improvements such as geothermal heat pumps, solar water heaters, and solar panels are not subject to the $1,500 maximum.
Taxes are if nothing else, complex.
So what does the above mean to you as a homeowner and a taxpayer? Let's try and put it in terms that we can wrap our head and wallets around.
The bottom line is this.
The government is going to give you back up to $1,500 if you install, change to or upgrade to qualifying energy efficient home heating and cooling equipment.
And, if you chose to go the renewable energy HVAC route and add geothermal, the returns are even greater, with a full 30% tax credit and no maximum cap.
Qualifying equipment specifications can be found at www.
gov Here are examples of what you can expect.
OK, so you need to change or upgrade your existing HVAC system.
Any amount you spend to make these upgrades, up to $5,000 will return 30% of your investment back to you in the form of a tax credit when you file your taxes next year.
And, if you do not use all of your $1,500, you can "bank" the difference and use the bank for additional qualifying home improvement projects, such as insulation in the next tax year.
What will happen in plain terms, if you are like most and have a job and have too much taxes taken out of your pay each period, not only will you get that back as usual, but you could also receive an additional $1,500.
Sweet Huh? Another way of looking at is like this.
If you make these upgrades and your bill, including installation charges runs you $5,000, then after your tax credit is considered, your real cost of project is actually $3,500.
That is like getting a 30% discount on the newest technology.
That is a rare event and one that should seriously be considered.
The fact is the best investment for your hard earned dollars seriously could be your next heating and cooling system.
Not only will you save money by upgrading efficiency, but you will save huge at tax time.