Consumer Tax Incentives

Home Heating & Cooling Equipment

What are the incentives for home heating & cooling equipment?

Purchasers of highly efficient heating, cooling, and water heating equipment can take tax credits of up to 10% of the cost of qualifying equipment. These credits are available for systems placed in service from January 1, 2012 through December 31, 2013.The credit is limited to $50 - $500 dependent on the product type. See equipment descriptions below for more details.

I don't think I qualify for this incentive  - where can I find information on state-level incentives?

What types of equipment qualify?

What are the efficiency requirements to qualify for the credits?

Manufacturers and retailers should be able to help you tell whether a specific product qualifies.
The qualification specifications are:

Where must the equipment be used?

Under guidance issued by the IRS, equipment is eligible if installed in a home occupied by a taxpayer as their principal residence at the time the equipment is installed. This implies that equipment in new homes is generally not eligible since in new homes equipment is generally installed prior to occupancy. However, efficient equipment in new homes can help that home qualify for the new home tax credit.

What do I need to do to qualify for the incentives?

Under the IRS rules, manufacturers need to certify that specific measures are eligible. Homeowners should obtain a copy of this certification when buying these products from the manufacturer, contractor or retailer. Certifications need not be submitted to the IRS, but should be kept on file in case the IRS has questions. Homeowners should also make notes on when each eligible measure is installed- only measures "placed in service" in 2009 or 2010 are eligible.

Click here to access IRS guidance on qualifying energy-efficient property.

I don't think I qualify for the incentive - where can I find information on state-level incentives?

To apply for the incentive, use IRS form 5695. Please note that this version of the form is for 2008, and so does not include line items for the incentives discussed on this page. There will be a section for these incentives on the 2009 iteration of the form which will likely be available in late 2009 or early 2010.

Where can I find out more about qualifying products?

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