Energy Tax Credits For Homeowners

Energy Tax Credits for Homeowners

Homeowners who purchase high-efficiency heating and cooling equipment may profit from recently enacted legislation.

President Bush signed the Energy Policy Act of 2005 in August of last year. The act includes the home-energy efficiency tax credit, which provides homeowners with up to $300 in tax credits when they buy eligible high-efficiency heating, cooling, and water-heating equipment. The following is how the statute defines the type of equipment and the amount of the credit:

• $150 for high-efficiency gas, oil, and propane furnaces and boilers

• Central air conditioning units with high efficiency, including air-source and ground-source heat pumps: $300

• High-efficiency heating and cooling fans: $50

High-efficiency water heaters, including heat-pump water heaters, start at $300.

Homeowners should be able to ask manufacturers and retailers whether a certain product qualifies for a tax credit. Among the qualifying efficiencies specified in the bill are:

• Annual Fuel Use Efficiency (AFUE) of 95 or greater for furnaces and boilers;

• Central air-conditioning units: SEER 15 and EER 12.5;

• Air-source heat pumps must have a heating seasonal performance factor (HSPF) of 9 or higher, a SEER of 15 or higher, and an EER of 13 or higher.

These high-efficiency items will make it easier for households to minimize energy consumption and lower their energy costs, in addition to delivering tax benefits. To qualify for the tax credits, homeowners must provide proof of the equipment’s efficiency and the date it was installed. Between January 1, 2006 and December 31, 2007, the equipment must be installed.



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