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Tax Credits Extended Retroactively

Jan. 09, 2013

We’re all of differing opinions about the “fiscal cliff” deal that was reached last week, but one thing we do agree on: Reinstating the high-efficiency heating, cooling, ventilation, and water heating tax credits that expired on December 31, 2011 and extending them through the end of 2013 was a great move no matter which political party you align yourself with.

The Energy Improvement and Extension Act of 2008, in conjunction with Internal Revenue Code Section 25C, allowed for tax credits for equipment of specific efficiency levels; it took effect on January 1, 2009 and was allowed to expire on December 31, 2011. Now, they’re extended both back to January 1, 2011 and forward to December 31, 2013.

The tax credits have very specific requirements:

1.       Central air conditioners, $300 in credit

a.       Split systems must be at least 16 SEER or 13 EER

b.      Packaged systems must be at least 14 SEER or 12 EER

2.       Electric heat pumps, $300 in credit

a.       Split systems must be at least 8.5 HSPF; 12.5 EER; or 15 SEER

b.      Packaged systems must be at least 8.0 HSPF; 12.0 EER; or 14 SEER

3.       Furnaces, $150 in credit

a.       Must be natural gas, oil, or propane

b.      AFUE of 95 or greater

4.       Boilers, $150 in credit

a.       Must be natural gas, oil, or propane

b.      AFUE of 95 or greater

5.       Water heaters, $300 in credit

a.       Natural gas, oil, or propane water heaters must be 90% efficient or have an energy factor of at least 0.82.

b.      Electric heat pump water heaters must have an energy factor of 2.0 or more.

6.       Advanced main air circulating fans, $50 in credit.

a.       Must be used in a natural, gas, propane, or oil furnace

b.      Annual electricity use must me no more than two percent of the furnace’s total energy use.

If you purchased any of these products in 2012, be sure to claim all the tax credits you are entitled to.  If you have any question about whether the equipment you installed qualifies, don’t hesitate to call us.  We’ll be happy to answer any questions you may have.

If you’ve been thinking about installing new heating and cooling equipment, a new water heater, or whole-house fan in your home, this is the year to do it.  The when you take into account the tax credit, you can more easily afford to upgrade a mid-efficiency unit to a high-efficiency unit.  It will save you hundreds of dollars over the life of the unit, which makes it a very good investment indeed.

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Thornton & Grooms
24565 Hallwood Ct
Farmington Hills, MI 48335
(248) 644-7810
MI Plumbing Lic. #: 8106666
MI Contractors Lic. #: 7100232
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