2009 Stimulus Package

Federal Tax Credits

How do the 2009 Federal Tax Credits Affect Me?

Recently signed into law by President Barack Obama, the Economic Recovery Act, a $787 billion Federal Stimulus package offers consumers a unique opportunity to replace old inefficient Heating, Cooling or Plumbing systems and in the process reduce energy output, help the environment, improve home comfort and receive a 30% tax credit starting February 17, 2009.

The new law will allow homeowners to claim 30% of the costs (up to a $1,500 limit) for the installation of higher efficiency furnaces and boilers, air source heat pumps, central air conditioners, and hot water heaters in tax years 2009 and 2010. The previous tax credits were limited to $300 for central air conditioners and heat pumps and $150 for furnaces and boilers.


Details for Residential Tax Credit:

• Larger Tax Credit
  For qualified improvements, homeowners may be able to claim tax credits equal to 30% of the installed costs (up to $1,500).

• Longer Term
  The new tax credits are retroactive to January 1, 2009, and expire on December 31, 2010. The $1,500 limit is for all improvements made during the two-year term, not $1,500 each year.

• Per-Appliance Caps Removed
  Homeowners may use the entire $1,500 tax credit limit on a single qualifying improvement. The previous per-appliance caps that limited the homeowner to just $150 for a high efficiency furnace or $300 for a high efficiency central air conditioner or heat pump have been removed.

• Lifetime Limit Removed
  Homeowners that previously claimed tax credits in 2006 or 2007 are eligible for the full $1,500 limit.

• Expanded Geothermal Tax Credits
  Homeowners who install geothermal heat pump systems may be able to claim up to 30% of the installed costs in tax credits in the year the system is placed into service. The $2,000 tax credit limit has been removed. The geothermal tax credit has a longer term, from January 1, 2009 and expires December 31, 2016.