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According to McCrudden, one of the most frequently asked questions concerned what actually qualified for the full tax credit of 30 percent of the installed costs up to $1,500.
“Some were arguing that any furnace with a qualified main circulating fan, even one with an AFUE below 95 percent, qualifies for full tax credit,” he said. “According to the IRS, a taxpayer can take into account ‘the amount paid or incurred to purchase and install the fan when determining the credit’ based on the percentage of the costs of the furnace that is allocable to the fan. If the fan costs $100 to install, then the tax payer may claim $30, 30 percent of the installed costs up to $1,500.”
Another issue commonly raised, as reported by McCrudden was the “transition between the tax credit program that had lower qualifying standards and the higher value tax credit with more stringent qualifying standards.
“According to the guidance, taxpayers who made qualifying installations under the old tax credit program between Jan. 1, 2009 and Feb. 16, 2009, get to claim the full $1,500 for equipment that qualified under the old plan,” he explained.
“This is most significant for anyone who installed a central air conditioner during that timeframe, because the minimum standard that applied back then was 15 SEER/12.5 EER. These lucky homeowners thought they were only getting a maximum $300 credit but it turns out they can claim 30 percent of the installed costs up to $1,500.”
For more information, visit www.acca.org.
Publication date: 06/22/2009