Ideal setup for TAX break?

[MYLEVL]

I have been reading about the new 30% up to $1500.00 tax break the government is giving to homeowners for new high efficiency sytems.

I was just curious what evap coil, condensor, and furnace combinations you would offer your customer to get this rebate. Im not asking for any particular reason, just figured it would be a cool thread to get some more discussion going about these new rebates.

[SplitCool DC17]

GeoThermal and Solar qualify for a full 30% tax credit from the Federal Gov. , other systems have a $1500 cap
State tax incentives vary state to state
You can get all this info at :
http://www.dsireusa.org/library/incl...ID=3&EE=1&RE=1

[MYLEVL]

If i read it correctly, it has to be atleast a 16 SEER system for the 1500 dollar rebate.

[SplitCool DC17]

Thats how I read it also , >=16seer for A/C split system

http://www.energystar.gov/index.cfm?...tax_credits#c3

[MYLEVL]

so is this a full 1500 dollar reimbursement to the homeowner after the show proof of purchase?

[BaldLoonie]

The way I understand it, it is a tax credit applied toward your 2009 tax liability. Let's say after all is said and done, your tax owed is $1600. This $1500 applies to it and you only owe $100.

OR lets say your tax liability is $2500, you had withheld $3000 so you will be getting a $500 refund. This $1500 comes off your tax liability changing it from $2500 to $1000. So with your $3000 withheld, you will be getting a $2000 refund.

Those making less money and say only had $1000 liability would only get that reduced $1000 to $0. You can't have a negative liability.

[MYLEVL]

Oh ok. great explanation. that pretty much clears it all up for me. I appreciate the input.

Other then that, I guess its just a matter of what brand you prefer to sell the homeowner or what brand they prefer to buy.

[SplitCool DC17]

Reimbursment ?, if thats how you read it, ok.

I read it as, my gross income will be reduced by $1500 when preparing my federal tax form.

[SplitCool DC17]

I think BaldLoonies definition makes more sense than the one I gave

Thanks Baldloonie

[TampaAC]

GUys make sure you know that depending on if you have a heat pump or straight cool you have to meet the min requirments of SERR, HSPF and EER. Don't assum that any 16 or 15 (Heat Pump) seer systems qualify. I know the heat pump side the new Trane XL20i heat pumps are not elligable on a 4 or 5 ton. I had to bring in an Amana rep so i can start selling there 4 and 5 ton systems to be sure all of my customers are gonna get the best bang for their buck.

[MYLEVL]

Reimbursment ?, if thats how you read it, ok.

I read it as, my gross income will be reduced by $1500 when preparing my federal tax form.

so you are saying instead of being taxed on say $61,500, you would be taxed on $60,000?

Im just trying to see what the actual cost to reward ratio is.

basically, if they spend an extra 2k (hypothetically) on 16 seer, how much of that 2k would they get back from the government. thats what im trying to figure out. but if it is how you worded it, i guess it all depends on their income level.

[MYLEVL]

GUys make sure you know that depending on if you have a heat pump or straight cool you have to meet the min requirments of SERR, HSPF and EER. Don't assum that any 16 or 15 (Heat Pump) seer systems qualify. I know the heat pump side the new Trane XL20i heat pumps are not elligable on a 4 or 5 ton. I had to bring in an Amana rep so i can start selling there 4 and 5 ton systems to be sure all of my customers are gonna get the best bang for their buck.

We do very minimal heat pumps where i currently work and dont plan to do many once i get my own stuff going. a 16 SEER system (non heat pump) should qualify, correct?

[TampaAC]

We do very minimal heat pumps where i currently work and dont plan to do many once i get my own stuff going. a 16 SEER system (non heat pump) should qualify, correct?

If you do your tax's and are going to get $500 back you will now get $2,000 back ($500 +$1,500 =$2000) This is a true tax CREDIT not a deduction. They are giving you credit for paying the government $1,500 in tax's.

as far as what qualifies for a straight cool A/C
Split Systems:
EER >=13
SEER >= 16

Package systems:
EER >= 12
SEER >= 14

Heat Pump
Split Systems:
HSPF >= 8.5
EER >= 12.5
SEER >= 15

Package systems:
HSPF >= 8
EER >= 12
SEER >= 14

***Note*** You have to meet all of the requirements (ie. SEER, EER, HSPF) Ask the manufactures of the products you carry to give you a list of all equipment that qualifies.

http://www.energystar.gov/index.cfm?...pr_tax_credits

[MYLEVL]

hmmmmmmmmmmmm. so if u charge an extra x(hypothetically ofcourse, im not sure off the top of my head what the added cost for 16 seer upgrade is) for 16seer over 14 seer then u can tell the customer he would get that 1500 back at the end of the year. so everyone should want to upgrade.

[motoguy128]

The way I understand it, it is a tax credit applied toward your 2009 tax liability. Let's say after all is said and done, your tax owed is $1600. This $1500 applies to it and you only owe $100.

OR lets say your tax liability is $2500, you had withheld $3000 so you will be getting a $500 refund. This $1500 comes off your tax liability changing it from $2500 to $1000. So with your $3000 withheld, you will be getting a $2000 refund.

Those making less money and say only had $1000 liability would only get that reduced $1000 to $0. You can't have a negative liability.

I'd like to see someone that has a tax liability <$1500.... that can afford a system that qualifies. You would have to spend at least $x to get the full $1500 credit.... Well... I guess there's always a DIY Goodman install.

[MYLEVL]

I'd like to see someone that has a tax liability <$1500.... that can afford a system that qualifies. You would have to spend at least $x to get the full $1500 credit.... Well... I guess there's always a DIY Goodman install.

yeah, i dont see a $xk 16 seer install happening unless its a 2 ton maybe?

[motoguy128]

so you are saying instead of being taxed on say $61,500, you would be taxed on $60,000?

Im just trying to see what the actual cost to reward ratio is.

basically, if they spend an extra xk (hypothetically) on 16 seer, how much of that xk would they get back from the government. thats what im trying to figure out. but if it is how you worded it, i guess it all depends on their income level.

No, it's a credit, not a deduction.

IF you pay over $x for a qualifying system, you will get $1500 back. So if a basic system in $x and you pay $x for a qualifying system, you get a $1500 credit.

[BaldLoonie]

Comes right off the tax you owe but can't exceed the tax you owe. And this is tax you owe before your withholding. Not many people would have a tax liability less than $1500 and still have money to spend on high end equipment!

[MYLEVL]

No, it's a credit, not a deduction.

.

yeah, i think we all were a little confused at first. i guess the best way to explain it is if you went down to jackson hewitt or any tax company and they said you were getting $2000 back and then you had them add in this tax credit, they would then show that you would get $3500 back.

Is there a form the home owners have to fill out or do they just keep the receipt/invoice proving they had a new 16SEER system installed?

[luv2cruiserccl]

Thought i would post some information on the state of michigan loan programs that i noticed they have. Just thought i would post for people living in michigan and looking for a Property Improvement Program. Looks to me that there a lot of things that are eligible improvements, including hvac.

http://www.michigan.gov/mshda/0,1607...7374--,00.html