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Federal Tax Credits American Recovery and Reinvestment Act of 2009 (ARRA)
On February 17, 2009, President Obama signed into law the American Recovery and Reinvestment Act of 2009. As a result of this act, the federal government announced tax credits for consumers who purchase qualifying high-efficiency heating and cooling products for their homes among other methods of saving energy. The amount of the credit is equal to 30% of the installed cost of the qualifying products, up to a total of $1,500.00.
What's the difference between a tax credit and a tax deduction? A tax credit is a direct reduction of the taxpayer's tax liability. A tax deduction is a reduction of a taxpayer's taxable income upon which the tax liability is calculated. Tax credits provide a great benefit to a taxpayer. To take this credit, the IRS requires Form 5695.
Air Conditioning and Heating products are eligible. The tax credits apply to a variety of products including heating and cooling, windows and doors, and more. The amount of the credit is equal to 30% of the installed cost of the qualifying products, up to a total of $1,500.00. The products must be installed in the tax years of 2009 and/or 2010 with a maximum of $1500 cumulative over the 2 year period. There are strict guidelines as to what qualifies and what doesn't. Check with your tax advisor on how to best take advantage of the tax credits. What are the qualification requirements for Air Conditioning and Heating products? The minimum efficiencies required for tax credits may be found in this chart.
Tax Form Required by IRS:
Use IRS FORM 5695 (Residential Energy Efficient Tax Credit) to file your claim. For the purposes of taking the credit, you can rely on a manufacturer's certification in writing that a product qualifies for the credit. Do not attach the certification to your return. Keep it for your records. Press Release:
AHRI Applauds Presidential Signing of Stimulus Bill
Released: 2/18/2009 12:00:00 AM "This bill provides enhanced incentives for consumers to upgrade existing heating and cooling equipment and it provides funding for the federal government, states, and cities to improve energy efficiency in buildings and schools," said AHRI President Stephen Yurek. "We are thrilled that there appears to be a paradigm shift in how policymakers view our industry. They now rightly see us as the solution providers we are and they have provided the market stimulus to help us provide those energy saving solutions for the good of the nation." For consumers, the bill includes:
The Air-Conditioning, Heating, and Refrigeration Institute (AHRI) is the trade association representing manufacturers of air conditioning, heating and commercial refrigeration equipment. An internationally recognized advocate for the industry, AHRI develops standards for and certifies the performance of many of these products. AHRI's 300+ member companies account for more than 90 percent of the residential and commercial air conditioning, space heating, water heating, and commercial refrigeration equipment manufactured and sold in North America
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