The year is half over, and many folks in the St. Louis metropolitan area haven’t used their ARRA tax credit yet. Don’t be left out of this great tax advantage by waiting too long to consider replacing or upgrading your aging heating and air system.
What is ARRA and what does it have to do with you? Well, if you are considering upgrading your air conditioning unit, replacing a water heater, adding a geothermal unit or a heat pump, or replacing any aging heating and/or cooling system with a more energy efficient unit, now’s the time! In fact, Uncle Sam wants to give you some financial incentives to act now.
Here’s why: On February 16, 2009, President Obama signed the American Recovery and Reinvestment Act of 2009 (ARRA) into law. ARRA is designed to get our economy moving again with spending and tax incentives aimed at investing in, among other things, increasing the energy efficiency and performance of homes and commercial buildings.
Here are the ARRA Tax Credit Details for Homeowners:
1. Larger Tax Credit for Traditional Heating and Cooling Improvements:
Homeowners may be able to claim tax credits equal to 30% of the installed costs (up to $1,500) on qualifying equipment.
2. Longer Term:
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 these two years.
3. Expanded Geothermal Tax Credits:
Homeowners who install qualifying geothermal heat pump systems can claim a federal tax credit of 30% of the installed costs… NO LIMIT! This credit must be claimed during the year the system is placed into service. The $2,000 tax credit limit has been removed. The geothermal tax credit has a longer term, from January 1, 2009 and expires December 31, 2016.
4. Per-Appliance Caps Removed:
Homeowners may use the entire $1,500 tax credit limit on a single qualifying improvement. The previous per-appliance caps that limited the homeowner to just $150 for a high-efficiency furnace or $300 for a high-efficiency central air conditioner or heat pump have been removed. Homeowners have a total of $1,500 available as a tax credit. Let’s say you install a new qualifying heat pump in 2009 and receive a $500 tax credit. You then install a qualifying heating and cooling system in 2010. You have $1,000 available as a tax credit on this second purchase.
And there’s more good news!
5. Lifetime Limit Removed:
Homeowners that previously claimed tax credits in 2006 or 2007 ARE still eligible for the full $1,500 limit.
Got a question about cost, warranties, installation, or how to claim your ARRA tax credit? Call Ricotta at 636-274-5900 and talk to a service representative with your questions, or let us come out and give you a free estimate. Ricotta has service technicians in your area!
– LEW of the Ricotta Blog Team