Aug. 22, 2011
A new air conditioner could save your sanity and quite possibly your marriage, but a new heating and air conditioning system doesn't come cheap. The good news: You may be able to get some of that money back when you file your tax return. The bad news? You would have been eligible for a much larger tax credit if you had replaced your HVAC last year, according to USA Today.
In December, Congress extended tax credits for energy-efficient home improvements through 2011, but it also pared them back. The maximum tax credit you can claim for most energy-efficient home improvements in 2011 is $500, down from a maximum credit of $1,500 in 2009 and 2010. The law also caps the amount you can claim for specific projects.
For example, the maximum tax credit you can claim for an energy-efficient heating and cooling system is $300, said Helen O'Planick, an enrolled agent in Manchester, Pa. The maximum credit you can claim to replace your leaky windows is $200.
Still, a modest tax credit is better than none at all. Homeowners who are considering energy-efficient improvements should take advantage of it while it lasts, because there's no guarantee the credit will be extended, O'Planick said.
For more information, see our Government Energy Rebates and Tax Credits research center.