Tax Credits

ABOUT THE TAX CREDIT

How does the new economic stimulus affect me?

The American Recovery and Reinvestment Act of 2009 (ARRA) combine 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. 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 Energystar.gov FAQ for more information.

Am I still eligible to get instant rebates from Peters Associates & it’s affiliates?

Yes! You can still claim manufacturer rebates, PECO REBATES and Philadelphia Electrical Association rebates in conjunction with your Federal Tax Credits and get INSTANT savings, as well as money off your taxes at the end of the year.

How do I claim the tax credit?

When Peters Associates installs your new heating & air conditioning system, you will be provided with a packet that contains 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 $1,500.00

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.