In an effort to help reduce the dependence on foreign sources of energy and to help offset costs of making your home more energy efficient, the government has been providing tax credits to homeowners. This has been going on for several years and was set to expire at the beginning of 2011. Luckily for homeowners, earlier this year the government passed a vote by nearly a 2-1 margin to extend the tax credits on high efficiency HVAC equipment through the end of 2011. The extension of the tax credits is at a lower value, capped at $500 rather than $1500 prior to the extension, but it maintains the tax credits and leaves the door open for Congress to change or restore the credits at the end of 2011 when they expire. Rather than have the tax credits disappear altogether, they extended the credits at a lower cap.
This makes 2011 a perfect time to purchase a new energy efficient unit if you missed the opportunity in the previous years. If times were tough a few years ago and you didn’t have the means to upgrade your units, now would be a good time to start thinking about a new unit. As we stated above, the program changed from previous versions of the tax credit but it is still able to provide incentives for your family. For instance, the credit is no more than 10% of your energy efficient improvement costs – upgraded insulation, windows, HVAC equipment – up to $500. Special credit limits for air conditioners and heat pumps are $300 and for furnaces they are $150. If you already receive credits of $500 or more from improvements made prior to 2011, you won’t be able to claim new credits for additional improvements.
With the tax credits for high efficiency HVAC units extended until the end of 2011, homeowners have a great opportunity to upgrade their old units and save some cash. Give us a call if you are interested in a new AC, Furnace or water heater!