TAX CREDIT * Frequently Asked Questions.....
How does the new economic stimulus affect me?
The American Recovery and Reinvestment Act of 2009 (ARRA) combines spending and tax incentives designed to invest in road and energy infrastructure, and increasing energy efficiency and performance of America’s homes and buildings. The law makes important changes to existing tax credits for qualified home improvements of higher efficiency heating, air conditioning and water heating equipment.
What’s the difference between a tax credit and a tax deduction?
A tax credit reduces the amount of income tax you have to pay. For example, if you owe $800 in taxes and have a $300 tax credit, then you will only owe $500. Or if you owe nothing, you'll get a $300 refund. This is only applicable to taxpayers - if you do not pay tax at all, you are not eligible for a tax credit. If you normally recieve a refund on your taxes, this credit could increase your refund up to $1500.00.
A tax deduction reduces the amount of income subject to tax. For example, if your taxable income is $25,000 and you have a $500 tax deduction, your taxable income would be reduced to $24,500. See the your tax preparer for more information.
Am I still eligible to get instant rebates from Riesen PHI & Carrier?
Yes! You can still claim manufacturer rebates in conjunction with your Federal Tax Credits and get INSTANT savings, as well as money off of your taxes at the end of the year.
How do I claim the tax credit?
The IRS has directed taxpayers to use Form 5695 to claim the credit. When Riesen PHI installs your new heating & air conditioning system, you will be provided with the Manufacturer’s Certifications and an ARI Certificate so you or your accountant will be prepared to claim your tax credit.
What is the amount of the new tax credit?
For the qualified home improvements, homeowners may be able to claim tax credits equal to 30% of the installed costs, up to a total of $1,500.
What is the time frame for the new tax credits?
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.
Can I claim $1,500 in tax credits for improvements made in 2009 and again for improvements in 2010?
No. Homeowners may only be eligible for a total of $1,500 in tax credits for improvements made in the combined two year period of 2009 and 2010.
What happens if the 30% of the installed costs is less than $1,500?
The homeowner can “bank” the remaining available tax credit for other qualified improvements. Any single installation that costs more than $5000 will instantly reach the $1,500 limit.
Does the tax credit apply to the cost of the equipment or equipment plus labor?
Yes, the credit applies to the installed costs of the qualified equipment, which includes labor.
QUALIFYING FOR THE TAX CREDIT
What can I do take advantage of the new energy tax incentives?
Homeowners can receive a substantial tax credit for home efficiency improvements on new high efficient air conditioners, heat pumps, furnaces, boilers and water heaters.
Are the tax credits different for geothermal heat pumps?
Yes, 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. However, there is no dollar limit to the credit on geothermal heat pumps. The geothermal tax credit also has a longer term, from January 1, 2009 and expires December 31, 2016.
What if I install a furnace that meets the 95% AFUE standard, but with a central air conditioner below the standard? Can I still claim the full $1,500?
Homeowners can claim 30% of the final installation costs up to $1,500 associated specifically with the 95% AFUE furnace. Should the installation costs associated with the furnace not reach $5,000, 30% of the installation cost can still be claimed and the difference between that amount and the $1,500 cap can be applied to any other qualifying home energy improvements.
Can I use the entire $1,500 tax credit on a single qualifying home improvement?
Yes. Previous per-appliance caps that limited homeowners to just $150 for a high efficiency furnace or $300 for a high efficiency central air conditioner or heat pump have been removed.
What if I previously claimed tax credits in 2006 or 2007?
Homeowners that previously claimed tax credits in 2006 or 2007 are eligible to claim the full $1,500 limit.
How do I know which specific equipment or improvements qualify for the tax credits?
There are a wide range of products available that qualify for the full tax credits. Schedule an appointment for a FREE, detailed proposal from a Riesen PHI Comfort Consultant who will review all options available to you.
It’s easy, just call 419-586-2639, or email riesen@bright.net.
Can I claim the credit for improvements on a second home?
No. The tax credit is only available for improvement to the taxpayer’s primary residence.
Can modular or mobile homeowners qualify?
Yes. As long as the improvements meet the qualifying criteria and the homeowner’s primary residence they may claim the tax credit.
For a FREE consultation on energy-efficient heating and cooling equipment for your home, call 419-586-2639 to start saving now.
*Every taxpayer's income situation is unique. Please call your tax preparer to see how you can take advantage of the tax credit. RPHI makes no guarantees or claims as to your eligibilty or individual tax situation.
