HVAC Tax Credits Scaled Back, But Very Important for 2011!

The extension of the Section 25C Tax Credits are a done deal, and while much smaller for 2011, when combined with utility rebates, they remain a viable force to keep the consumer focused on upgrading to 95% AFUE furnaces and 16/15 SEER (AC/HP) outdoor units for the next calendar year.

Thanks to HARDI for the following summary of the changes;

President Obama signed into law an $858 billion dollar tax relief and benefits package on Friday which includes.

A two year extension of the current tax rates.

An extension of federal unemployment benefits for 13 months.

Setting a two-year Estate Tax at 35% for individual inheritances over $5 million.

A 2% reduction in an employee’s contribution to Social Security. Employer’s contributions to Social Security will remain at current levels.

Also included in the tax bill is a one-year extension of the 25c tax credit, which is returned to pre-stimulus levels. Some specifics of the bill as they relate to 25c.

Eligible taxpayers can claim up to $500 in 2011.

All efficiency levels stay at the current levels, except for natural gas and propane hot water boilers, and oil hot water boilers oil furnaces, which will move to 95% AFUE.

An individual or household lifetime cap of $500, which dates back to January 2006. For example, if an individual has claimed the 25c tax credit since 2006, for any qualifying upgrade up to or over $500, they would be ineligible to claim the credit in 2011.

As of January 1, 2011, the new credit levels will be:

$50 for any advanced main air circulating fano $150 for any qualified natural gas, propane or oil furnace or hot water boiler.o $300 for any item of energy-efficient building property (i.e. Central Air/ Heat Pumps)

$150 for any qualified natural gas, propane or oil furnace or hot water boiler.o $300 for any item of energy-efficient building property (i.e. Central Air/ Heat Pumps)

$300 for any item of energy-efficient building property (i.e. Central Air/ Heat Pumps)

Taxpayers should always consult with their tax professional to determine the applicability of any tax credit to their particular situation. More information is available at both the IRS and DOE websites.

Federal Tax Credits End - The Scramble Is On!

With the scheduled end of the Federal 25C Tax Credits for replacement of residential heating and cooling systems with specified high efficiency models, homeowners and contractors alike are scrambling to get schedules coordinated with demand in order to meet the Dec 31, 2010 deadline. I have advised all of my friends and family to call quickly as available days in November and December are limited by holidays and weather, and contractor installation slots are filling up quickly. If your system is older and you'd like to enjoy the higher efficiencies available today with assistance from a federal tax credit, call your heating and cooling professional asap so you don't miss this incredible savings opportunity.

THE END IS NEAR! - Federal Tax Credits Coming to an End!

The Section 25C Federal Tax Credits for energy efficiency upgrades that provide up to a $1500 incentive for you to replace your home's old heating and cooling system with a new high efficiency system are scheduled to expire December 31, 2010. That means just 123 days left to increase the comfort and reduce the operating costs of your home. Combined with manufacturers' incentives, the savings can be HUGE! This year has seen the lowest net (out-of-pocket) prices for installed HVAC systems in years. Many homeowners are combining utility rebate programs, manufacturer incentives, and the soon-to-be-gone federal tax credits for truly ONCE in a lifetime savings. Your neighborhood York Dealer can tell you everything you need to know about the new systems, starting with the exciting York Hybrid Comfort System that works with both gas and electric energy sources to provide hyrbrid energy savings during the heating season and high efficiency cooling in the hot summer months. You can find out more at http://www.yorkupg.com/comfort/

York and Coleman Extend Rebate Program - WOW!

Both York and Coleman have extended their consumer rebate program until September 30, 2009. Coupled with the Missouri Gas Energy rebates, the ARRA (Stimulus) Tax Credits, and the competitive nature of the HVAC industry right now, the fall of 2009 will go down as one of the best times to replace residential HVAC systems in a long time. Consumers need to know that this 'perfect storm' of tax credits, manufacturer rebates, discounts, and utility promotions is something that no one in our industry has ever seen before. If you thought cash for clunkers was something, these savings to replace worn out equipment with new systems that pay for themselves WITHOUT any of these promotions, credits, or rebates are truly incredible.

Before Stimulus - Green Shoots Continue to Grow Strong in Greensburg, Ks

Before the economy took the tumble, we were all focused on high energy prices. Now that the economy has begun some serious healing, we are starting to get back to paying attention to the economic problem that we will always have - the ever increasing cost of energy. Whether for a geo-political reason like energy independence or a sensible midwestern no-nonsense reason like 'avoiding waste', energy efficiency will be coming back in the spotlight in a big way as this economic recovery continues. One place that continues to focus on the 'Greening of America' is Greensburg, Kansas. Here is another interesting story about the continuing changes in Greensburg and the work of York and Fahnestock Plumbing, HVAC and Electric to keep that movement alive (Click on the link to view now);

http://finance.yahoo.com/news/Johnson-Controls-Donates-iw-3621324397.html?x=0&.v=1

IRS Issues Further Guidance on ECM Tax Credit - LIMITS Tax Credit for Furnaces below 95 AFUE

The IRS has issued guidance on the tax credit for furnaces that utilize an 'advanced technology main air circulating fan' or ECM motor. They have stated that only the amount of the purchase allocated to the fan qualifies for the tax credit. This is in the case of a furnace that does not otherwise qualify (a furnace less than 95 AFUE). This would limit the tax credit to something near $150 for most applications (assuming a value of the ECM equipped fan section of about $500). The complete guidance can be found here;

http://www.irs.gov/pub/irs-drop/n-09-53.pdf

HARDI Update on ECM Equipped Furnace Credit

HARDI has just posted an update on their tax credit website regarding the IRS' indication regarding the tax credit that would be allowable for furnaces that HAVE an ECM motor, but are below 95 AFUE. While not final, the early indication is that the 30% tax credit would be available ONLY for the 'fan portion' of the furnace, not for the whole furnace for sub-95 AFUE furnaces. This update can be found at http://www.energyefficiencycredits.blogspot.com/ and reinforces the early interpretation that, in order to qualify for the tax credit at the most affordable cost, the 95 AFUE single stage furnace is a real winner!