What is the Federal Energy Tax Credit?

Thanks to federal legislation, homeowners may be eligible for a tax credit if they purchase certain types of heating, ventilation and air conditioning (HVAC) systems, water heating equipment, or make other energy-related improvements to their homes between January 1, 2009 and December 31, 2011. This legislation provides incentives for increasing the efficiency and performance of America's homes and commercial buildings. As a part of the recently passed tax bill, Congress modified and extended its energy efficiency tax credits for appliances, new homes and retrofits to existing homes, which includes the 25C heating and cooling equipment tax incentive for another year. The new bill extends eligibility to the end of 2011, but reduces the incentive to a $500* maximum tax credit.

As a leader in producing energy-efficient home comfort solutions, Trane offers many products that are eligible under this new law. Depending on the type of system or product purchased, it is possible to qualify for a tax credit of up to $500* on your 2011 income tax return.

How do I apply for a Tax Credit?

For qualified improvements, homeowners may be able to claim tax credits equal to 10 percent of the installed costs (up to $500 maximum*). The extended tax credit is in effect for all qualifying systems and products installed during the 2011 calendar year and expires on December 31, 2011. The tax credit applies as a direct reduction of taxes owed. In the past, IRS has directed taxpayers to use Form 5695 (the Residential Energy Efficient Property Credit). To fully understand how the new tax credit may apply to you and what you can do to obtain one, you should consult with a tax professional. Subject to IRS regulations. Customers should consult a tax professional for advice on tax preparation. Qualified products or systems installed during 2009 and 2010 may also qualify for a tax credit equal to 30 percent of the installed costs (up to $1,500) for those respective tax years.

Get your tax credit certificate

Which products are eligible?

The following residential Trane products qualify for the federal tax credit:

• Split system air conditioning – 16 SEER/13 EER (both efficiency levels must be met to qualify for the tax credit)
• Split system heat pump – 15 SEER/12.5 EER/8.5 HSPF
(all three efficiency levels must be met to qualify for the tax credit)
• Gas furnace – 95% AFUE
• Packaged air conditioning, heat pump or dual fuel products – 14 SEER, 12 EER, 8 HSPF

Maximum tax credit amount - $500*. The legislation specifies 10% of the cost of qualifying equipment, including installation costs, subject to a $500* maximum per homeowner. The tax credit is effective for all qualified systems installed from 1/1/2011 through 12/31/2011. The tax credit is only valid for taxpayers that own their home and it is used as the principal residence.

In addition, you’ll find the government’s summary of Energy Star products that are eligible for HVAC credits at www.energystar.gov/taxcredit. As always, you can also contact your local independent Trane dealer who can help you determine product model numbers if necessary.

The IRS is responsible for the implementation of the tax incentive portions of the legislation, so details of how this tax credit will be administered will be included in future IRS rules. As soon as the IRS releases its applicable rules, Trane will communicate to its independent distributors and dealers, what documentation homeowners will need, how it is to be filed and where they can get the required documentation. Please check with your dealer or revisit this page for updated information coming soon.

*$300 maximum for a qualifying air conditioning system, heat pump or packaged system, $150 maximum for a qualifying furnace, and $50 maximum for a qualifying product with an advanced circulating fan.