The 25C tax credits have been a popular sales tool for residential HVAC contractors since their introduction in 2006. Late last year, Congress extended the credits through 2011, and now many in the industry are wondering if Congress will extend the credits again for 2012.
While the original tax credit incentive made up to $500 available for eligible homeowners who made qualified upgrades to their homes’ energy efficiency, the incentive was modified to remove individual appliance caps, remove a lifetime cap on claims, and increased to up to $1,500 beginning in February 2009 and extending through 2010. In December 2010, Congress considered extending 25C for another year and ultimately did so, but changed the value of the credit. For 2011, Congress reduced the credit to up to $500, reinstated the individual limits for the qualifying types of equipment, and reinstated the lifetime cap. By reinstating the lifetime cap, any household that had claimed up to $500 in 25C credits since 2006 was ineligible to use it again.