As part of the recently passed tax bill, the 25C tax extension for residential high efficiency property has been extended for one year. The maximum tax credit that can be claimed has been reduced from $1500 to $500 for 2011. In addition, the 2011 tax credits have placed maximum amounts that can be claimed for the various components of the HVAC system, such as a $150 maximum tax credit for a 95% gas furnace and $300 for an air conditioner or heat pump. These component maximum amounts are additive to the $500 maximum lifetime tax credit.
Most of the HVAC qualifying efficiency levels have remained the same. The only exceptions are boilers and oil furnaces, where the qualifying efficiency has been increased from 90 AFUE to 95 AFUE. The following chart summarizes the difference between the 2009-10 tax credits and the newly passed 2011 tax credits. Changes in the tax credits for 2011 are highlighted in red.
2009-2010 Tax Credit
2011 Tax Credit
30% of installed cost up to $1500
10% of installed cost, up to $500
Split System:16 SEER & 13 EER Packaged Unit: 14 SEER & 12 EER 30% of installed cost, $1500 max
Split System:16 SEER & 13 EER Packaged Unit: 14 SEER & 12 EER 10% of installed cost, $300 max
Gas Furnace: 95 AFUE Oil Furnace: 90 AFUE Boilers: 90 AFUE 30% of installed cost, $1500 max
Gas Furnace: 95 AFUE Oil Furnace: 95 AFUE Boilers: 95 AFUE 10% of installed cost, $150 max