Tax Rebate

February 22, 2009

Ref: 2009 Federal Tax Credits

President Barack Obama signed into law on Feb. 17, 2009 the Economic Recovery Act. The legislation provides an extension of the consumer tax credits for certain HVACR equipment. Beginning at the date of enactment (Feb. 17, 2009), consumers can claim a $1,500 aggregate tax credit for qualified energy efficient home improvements

There are some significant changes to the energy efficiency tax credits. The highlights are:

• The tax credits that were previously effective for 2009 have been extended to 2010 as well.
• The tax credits that were for a specific dollar amount (example $300 for a qualifying central AC) have been converted to 30% of the installed cost.
• The maximum credit has been raised from $500 to $1500 for two years (2009-2010).

Here is some additional information on the tax credits.

• Qualifying equipment must be placed into service from January 1, 2009 through December 31, 2010.
• Qualifying equipment must be for taxpayer´ s principal residence.
• Maximum credit amount is $1500 in 2009 and 2010 for most home improvements. Geothermal heat pumps, solar water heaters, solar panels, fuel cells, and windmills are not subject to this cap.
• For record keeping, consumers should save their receipts and the Manufacturer Certification Statement. A Manufacturer´ s Certification is a signed statement from the manufacturer certifying that the product or component qualifies for the tax credit. The IRS encourages manufacturers to provide these Certifications on their website to facilitate identification of qualified products. Taxpayers must keep a copy of the certification statement for their records, but do not have to submit a copy with their tax return.
• Improvements made in 2009 will be claimed on 2009 taxes (filed by April 15, 2010). Consumers should use IRS Tax Form 5695 (2009 Version).

Here is an overview of qualifying equipment.

Product Type	Tax Credit Specification	Tax Credit	Notes
Central A/C	Split Systems: EER >=13 SEER >= 16 Package systems: EER >= 12 SEER >= 14	30% of cost, up to $1,5002	Note — not all ENERGY STAR products will qualify for the tax credit.
Air Source Heat Pumps	Split Systems: HSPF >= 8.5 EER >= 12.5 SEER >= 15 Package systems: HSPF >= 8 EER >= 12 SEER >= 14	30% of cost, up to $1,5002	Note — not all ENERGY STAR products will qualify for the tax credit.
Natural Gas or Propane Furnace	AFUE >= 95	30% of cost, up to $1,5002	Not all ENERGY STAR products will qualify for the tax credit.
Oil Furnace	AFUE >= 90	30% of cost, up to $1,5002
Gas, Propane, or Oil Hot Water Boiler	AFUE >= 90	30% of cost, up to $1,5002	Boilers: AFUE >= 85
Advanced Main Air Circulating Fan	No more than 2% of furnace total energy use	30% of cost, up to $1,5002

2Subject to a $1,500 maximum per household for all improvements combined.

For additional information on these tax credits please visit the following website.

http://www.energystar.gov/index.cfm?c=products.pr_tax_credits

Sincerely,

John Gobble
Trane / American Standard Marketing Manager
Lyon, Conklin & Co.

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