Tax Credits for Central Air Conditioning Systems
Written by: Admin | Date: Saturday, 21st May 2011

Federal tax credits for consumer energy efficiency encourage homeowners to purchase appliances that use less energy, helping the environment and saving money. In 2011, the rules for this popular program have changed. Certain appliances are eligible for a tax credit that is 10% of purchase price, while others are eligible for a fixed amount of credit regardless of purchase price. Some central air conditioning systems (CACs) are eligible for a $300 credit. How can consumers find out if the system they are considering is eligible?

There are two types of CACs. Split-system CACs are more common in households. They consist of an outdoor condenser and compressor and an indoor evaporator coil and air handler. In package systems, condenser, compressor, and evaporator coils are all in one large outdoor cabinet. Split and package systems have slightly different requirements for the tax credit.

To qualify for the tax credit, CACs must perform above a certain energy efficiency ratio (EER) and seasonal energy efficiency ratio (SEER). Split systems must have an SEER of 16 or higher and an EER of 13 or higher. Package systems are required to have a SEER of 14 or higher and an EER of 12 or higher.

If a CAC meets the energy efficiency requirements, the manufacturer is required to produce a certification statement indicating that the product is eligible for a tax credit; HVAC contractors have these statements and can provide customers with a copy.

Homeowners should keep the manufacturer’s certification statement and CAC receipt for their records. These items don’t need to be submitted for tax purposes; to claim the tax credit, IRS Form 5695 must be submitted with the federal income tax form.

Central air conditioners which meet the efficiency guidelines will not only net homeowners a tax credit, but also produce significant energy savings over time.

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