The government has come up with a tax credit for new energy efficient cooling systems in our homes. As part of the provisions in the Energy Policy Act 2005, homeowners are entitled to claim tax credits on the use of a few energy saving items. They include the use of energy saving windows, doors, roofing, furnace and boiler, water heater and air conditioner. As energy becomes scarcer by the day, it is essential to conserve as much energy as possible. The government, by way of giving tax credits, also encourages using alternate sources of energy.
Using energy efficient air conditioning systems is one of the items that qualifies you for tax credit. Those who install this type of air conditioner are eligible for tax credit of up to $300 dollars. The models that qualify for this are obviously more expensive than the ordinary ones. However, this calculation would show that it is advisable to install a new energy saving air conditioner. Even if you save just $10 dollars a month on average by way of electricity bills it comes to $120 for a year. Add to that the tax credit of $300, your net savings is $420. This amount should be good enough to talk a homeowner into buying an energy efficient air-conditioner.
Not all air conditioners are eligible for a tax credit, not even all the Energy Star air conditioners qualify. Very efficient central air conditioners qualify for the tax credit if they meet the following criteria:
- The Energy Efficiency Ration has to be 13.0 or higher (in some states 12.5).
- Certified technician needs to install the equipment.
- The Seasonal Energy Efficiency Ration (SEER) has to be 15.
The tax credit for energy efficient cooling systems in our home is just another step in saving money on both your energy bill and taxes. Since tax credits are reduced from the actual amount of tax you owe, not your gross income, you should strongly consider taking advantage of this one.
