Can I get a tax credit for installing a new central air conditioner?
Maybe. Last year’s stimulus law expanded the tax credits for energy-efficient home improvements and extended the credit for 2009 and 2010. If you install an eligible central air-conditioning system in your principal residence before December 31, 2010, you could qualify for a tax credit worth 30% of the cost of the air-conditioning system and installation, up to a $1,500 maximum. Because it is a tax credit, it lowers your tax bill dollar for dollar.
Only certain central air-conditioning systems qualify for the credit, based on their energy efficiency. Many manufacturers provide a Manufacturer Certification Statement on their Web sites, certifying that the product qualifies for the tax credit. Your HVAC contractor may also be able to provide you with a copy. In some cases, you may need to replace both the heating and air-conditioning systems to get the credit. See the detailed explanation in the Federal Tax Credits for Consumer Energy Efficiency page at the government’s EnergyStar.gov Web site (the central air-conditioning requirements and FAQs are particularly helpful). Window-unit air conditioners are not eligible for the tax credit.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
To claim the credit, file Form 5695 with your 2010 tax return in the spring (the 2010 version of the form is not available yet, but here is a link to the 2009 form, as well as instructions and general information). You do not need to submit the Manufacturer Certification Statement of Eligibility with your tax return, but you should keep a copy with your records. The $1,500 maximum for the tax credit applies to 2009 and 2010 combined -- so if you took a credit for energy-efficient home improvements last year, you used up part of your allowance. A $1,000 credit claimed on your 2009 return, for example, means that your 2010 credit can’t exceed $500.
For more information about the tax breaks for energy-efficient home improvements, see Going Green Pays Off. For more information, see Energystar.gov.
-
Seven Ways to Reduce Taxes on Social Security Benefits in 2025Social Security Minimizing taxes on Social Security is an essential consideration for many retirees.
-
Sherwin-Williams Is a Sleeper of the 100,000% Return ClubSherwin-Williams has quietly carved out a massive return for shareholders over the years.
-
New Colorado Tax Credit: What’s the Scoop?State Tax Everything you need to know about the Colorado family affordability tax credit in 2025.
-
Key Family Tax Breaks Are on the GOP Chopping Block This YearTax Credits Several tax breaks, including the Child Tax Credit, may face reforms or be cut entirely as lawmakers seek revenue for Trump’s tax plans.
-
What's Going on With New Jersey Property Tax Programs?Property Tax ANCHOR and ‘Senior Freeze’ just got a refresh, and there’s a new program: Stay NJ. Learn how to save on New Jersey property taxes.
-
Five States With the Largest EITC ChecksEITC Households in these states received a larger Earned Income Tax Credit (EITC) last year.
-
Downsize in Retirement With 2025 Tax Benefits: Three Key StrategiesRetirement Taxes Downsizing retirees may benefit from tax savings, lower utility bills, and freed-up income. But could a new presidency impact your home sale?
-
Gov. Hochul Vows to Deliver $1 Billion in Tax Relief to New YorkersState Tax The proposed tax cuts would benefit New York middle-class families.
-
Maryland Property Tax Assessment: What It Means for YouState Tax Amid a growing deficit, Maryland property values are rising. Here’s more of what to know.
-
The American Opportunity Tax Credit (AOTC): How Much Is It Worth?Tax Credits This tax break can help you offset $2,500 in qualifying expenses tied to your higher education. Here's what you need to know.
