Energy Efficiency in Home Improvements Rewarded by Stimulus Bill

The American Recovery and Reinvestment Act of 2009, which became law Feb. 17, 2009, provides important improvements to the home energy efficiency tax credits they replace.

“Green” Air Conditioning, Furnaces and Water Heaters Qualify

Homeowners who purchase qualifying environmentally friendly “green” air conditioning, heating and plumbing equipment receive a tax credit of 30 percent of purchase price, up to a maximum credit of $1,500.

This upgrades the previous credits of $300 for some equipment, and others that provided credits up to 10 percent of purchase price, with a maximum credit of $500.

Some improvements, such as geothermal heat pumps, solar water heaters and solar panels are not subject to the $1,500 maximum. Other energy efficient home improvements that qualify include windows, doors, insulation and roofing.

$1,500 Tax Credit = $5,300 Tax Deduction

Unlike tax deductions, tax credits reduce taxes dollar-for-dollar. For example, if you owe $10,000 in federal income taxes, a $1,500 tax credit would reduce that amount to $8,500. For a person in a 28 percent tax bracket (taxable income of $78,850 - $164,550), the $1,500 credit is equivalent to a deduction of more than $5,300.

Requirements Overview

• “Green” Air Conditioning Equipment – a must have Seasonal Energy Efficiency Ratio (SEER) of 16, and Energy Efficiency Ratio (EER) of 13.
• Furnaces/Heaters – must have an Annual Fuel Utilization Efficiency of 95 percent or better.
• Heat pump systems must have a minimum 15 SEER rating with an EER of 12.5 and a Heating Seasonal Performance Factor (HSFP) of 8.5.
• Insulation is credited at 30% of the cost of the insulation up to $1500

Maximum credit is $1500 per homeowner in combined credits for all qualifying types of energy efficient systems. For a complete listing of all qualifying products, visit the Energy Star Website. The current program runs throughout 2009 and 2010.

To find out how you can qualify for this tax credit, call Berkey’s today at 817-481-5869, or send us a message from the Contact Us page.