Hvac Air Conditioning Heating Federal Tax Credit Changes for 2011 Savings up to 10% $500.00 the new Maximum

ACCA (Air Conditioning Contractors of America) have a new website feature helps contractors and Consumers Find Energy Efficiency Incentives – this wonderful page is worth a look here is the link:  http://www.acca.org/consumer/dsire

FP&L (Florida Power & Light) Residential A/C Rebate Schedule link: 

New Rebate Schedule (Effective March 2012), Rebate Schedule (Old Effective 2008).

Updated 04/26/12: The House Ways and Means Committee is scheduled to hear testimony today on various bills to extend the tax incentives that expired at the end of 2011 or will expire at the end of this year.

According to the Joint Tax Committee, there are approximately 70 tax incentives eligible for extension by Congress, many of them are targeted to help small business owners make capital investments in their businesses.

Members of the Congress will have the opportunity to testify in support of legislation to extend expiring tax provisions they have introduced or co-sponsored legislation this year. There is expected to be discussion of extending the tax credit for the installing higher efficiency HVAC equipment (Section 25C), construction of energy efficient homes (Section 45L), the 15 year straight line depreciation for qualified improvements to leasehold, restaurants, and retail buildings (Section 168), bonus depreciation for small businesses (Section 168), and increased expensing allowance to $500,000/$2,000,000 and expansion of Section 179.

As a member of the Residential Energy Efficient Tax Credit Industry Coalition, ACCA submitted testimony urging for the extension and expansion of the residential energy tax credit. The coalition is seeking a robust energy efficiency tax credit for qualified products, including furnaces, central air conditioners, and heat pumps, of 10 percent of the purchase price up to $1,000. The coalition believes that a $1,000 tax credit is generally the minimum incentive needed to motivate consumers to improve their homes by purchasing these higher-performing products, and to do so in sizable enough numbers to positively influence residential energy consumption.

To read the Member Proposals Related To Certain Tax Provisions That Either Expired In 2011 Or Will Expire In 2012, Click here. End of Update 04/26/12.

 Updated 2/29/12:   There is a bill circulating the Senate that, if passed, will create tax credits for consumers that reduce their energy usage by at least 20%. The bill establishes a $2,000 base credit for the first 20% decrease with a $500 stepend for each 5% reduction thereafter. The credit will be capped at $5,000 or 30% of the qualified expenditures, whichever is the lesser amount.

Experts have estimated that this bill will create about 19,000 jobs through contracting, supply, and manufacturing while saving 1.7 billion kilowatthours and 18 trillion Btu of fuel by 2016. This is enough energy to power 375,000 homes!

No one is sure if Congress will pass the bill as it does not identify where the funding will come from, but the fact that energy saving bills are still being considered in Congress is a good sign. This shows that the national mindset toward energy efficiency is changing, becoming more important to the everyday consumer. End of 2/29/12 update.

After hours of fitful debate, the House of Representatives passed the tax extender package last night by a vote of 277-148. President Obama is scheduled to sign it into law this afternoon. The new law will extend a number expired and expiring tax cuts and other incentives for individuals, families, small businesses, and investors.


If you listen to the news sound bites, everyone involved will says the bill is not perfect. Nearly every provision in the bill represents some form of compromise between Democrats and Republicans.


Included in the new law are the Section 25c tax credits, the official name for the energy tax credits available to eligible taxpayers who make qualified energy efficient retrofits to their homes. The tax credits are extended through 2011, but at a significantly reduced value and with changes made to some of the qualifying equipment standards.


Starting on January 1, 2011 and through December 31, 2011, an eligible homeowner can claim 10% of the costs, capped at $500, for the installation of qualified energy efficient improvements, subject to certain limits.


Under the new law, for HVAC and hot water equipment, the maximum a homeowner could claim is $300 for a qualified central air conditioner and heat pump, and $150 for a qualified furnace or hot water boiler, and $50 for any advanced main air circulating fan. The tax credit for qualified hot water heaters is limited to $300.


Beyond the change to the tax credit values, the new law will increase the qualifying standards for natural gas hot water boilers, propane hot water boilers, oil furnaces, and oil hot water boilers to 95% AFUE. The qualifying standards for natural gas furnaces and propane furnace remain at 95% AFUE.


The qualifying standard for central air conditioners and heat pumps, which were modified by the Stimulus bill in 2009, are not changed. Therefore, a central air conditioner must meet or exceed 16 SEER and 13 EER; and an air source heat pump must meet or exceed 15 SEER and 12.5 EER and 8.5 HSPF, in order to qualify for the tax credit.


Finally, the new law reinstates the lifetime credit caps, which disqualify any homeowner who has claimed more than $500 in 25c tax credits since January 1, 2005, from any further credits.


While the extension of the tax credits at a lower value is not ideal, it keeps the tax credits alive and leaves open the opportunity to change them in the next Congress and restore them to the $1,500 level. If the tax credits had not been included in the extender package, they would likely have disappeared forever.

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17 Responses to “Hvac Air Conditioning Heating Federal Tax Credit Changes for 2011 Savings up to 10% $500.00 the new Maximum”

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  3. Tamela Says:

    March 4th, 2011 at 2:32 am

    Don’t think it’s fair that I will only get a $500 rebate on my heating and air that I just got installed this month, when it was recently $1,500 this past tax year.Figures that us low income people get screwed at every thing.The $1,500 credit would have really helped me and my family fix up our old house.This is the reason there are so many foreclosures, because people can’t afford to pay high house payments, house insurance and fix up their homes.

  4. admin Says:

    March 4th, 2011 at 7:51 am

    You are not alone, many have expressed the same feelings and thoughts. Thanks for taking the time to say. Should you need anything more just let us know.

  5. Bob W Says:

    June 6th, 2011 at 2:27 pm

    $300 isn’t as good as $1,500 – but it’s better than nothing! I’ll take it!

  6. admin Says:

    June 6th, 2011 at 2:35 pm

    Do you need an estimate on a new or replacement system?

  7. Theoneandonly BiGMaC Says:

    June 10th, 2011 at 11:44 pm

    The federal credits are useless to the homeowner. The difference in cost from 13 SEER to improve to 15 SEER is 1500-2100 dollars for the 3-4 major brands. and the recpoup of the cost difference will require the home owner to use it a decade or more to be even…. I went 13 SEER and saved $2500. Don’t spend a dollar to save 35 cents

  8. Theoneandonly BiGMaC Says:

    June 10th, 2011 at 11:47 pm

    The difference in 13 SEER and 15 SEER units seems to be only the variable speed operation which can be retrofitted.

  9. Adam Says:

    June 24th, 2011 at 2:43 pm

    You should have been more diligent in investigating available incentives for the previous year, instead of complaining about what’s available this year. The problem is not what you stated, rather laziness and feelings of entitlement.

  10. Chris Says:

    August 23rd, 2011 at 7:06 pm

    I know that frustrating feeling and yeah we “should have” done it last year, but the money wasn’t in place and I wasn’t about to get tied into a loan I didn’t want in order to try to catch the deadline. Overall it definitely was my loss…

    HOWEVER, I did notice something suspicious. I got two quotes in 2010 (one mid year, one late in year) and BOTH were more expensive than they are in 2011. Comparing apples-to-apples (except for one unit is r410 only, the other unit was capable of both) should’ve been about the same or higher for this year.

    Many, many car buyers made poor decisions (aka were hustled) by car dealerships in the Cash for Clunkers program. Here locally, dealers were unwilling to negotiate decent pricing on cars b/c they were packed with customers paying top dollar for vehicles with “free rebate money” burning holes in their pockets. Normally it’s buyer beware at a car lot, but when the demand for the cars was so high they would not sell much lower than sticker price, it wasn’t fair.

    I’m suspicious that was happening in mid/end 2010 in the HVAC industry.

  11. admin Says:

    August 24th, 2011 at 7:57 am

    Dear Chris, The reason pricing maybe lower now then the same time last year, is more so due to the fact, there are many more one truck operations out there as the larger companies have been feeling the pinch of this wonderful economy and have let many of there personnel go. This has created a temporary influx of completion which will correct it’s self when the new operators realize they are under cutting the industry and them selves or work themselves out of business by operating in the red.

  12. Tru Says:

    August 31st, 2011 at 12:10 am

    I have just purchsed a home in central florida and am just learning about the rebates and tax credits. However, what I have discovered was that if I had not done homework BEFORE I got my estimates I wouldn’t have been able to emabarass a number of contractors and authorized dealers of name brand equipment who didn’t know themselves about the amount of the rebates. At first however, they gave me some good numbers that were affordable. But after they got quizzed they made an about face and had to redo their quotes at which points the number skyrocketed. This happened with several people bidding for the work on my house and has really made me believe that its just another scam because you need to get a loan to afford this high ticketed items. For example, a 15 seer ac system a year ago got $1500 in tax credit. Average price was about ^grand. Today to get the credit you have to spend at least 10 grand on a 16 seer or higher(?) and you get less. I know the economy is bad but I smell a real whale here. Something very fishy about this story with the government changing the level of eer and seer which costs more only to get less. Go figure

  13. admin Says:

    August 31st, 2011 at 6:56 am

    I was tempted to remove you post due to the outlandish claims made. I instead would really like to see your before and after proposals showing the price adjustments you spoke of. I would also like to see the estimate from the person claiming to have had a qualifing system installed for 1000.00 during 2010.

  14. William Zwick Says:

    September 23rd, 2011 at 2:06 pm

    I am going to replace a Hvac on a rental house I own. If it is a 15 seer will I be able to get a tax credit?

  15. admin Says:

    September 23rd, 2011 at 3:26 pm

    Depending on the model number of the unit you might get a tax credit if it is a package unit. If it is a split ac system then 15 seer will not quailify for the tax credit.

  16. james Says:

    February 20th, 2012 at 9:15 am

    is the $500 tax credit only good if you owe taxes(not getting a refund) on your 2010 1040?

  17. admin Says:

    February 24th, 2012 at 10:16 am

    In 2010 it was up to 1500.00 and it was a dollar for dollar credit ask your tax person but I if you owed 0.00 then you would actually get 1500.00 back for making the investment in the equipment.

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