Hi,
Make sure that the manufacturer or provider of the unit confirms that the AC qualifies for the credit. The maximum credit for all AC units is at $600 per year, and the maximum credit for all energy-efficient improvements is $2,000 per year. The credit is determined by the amount you spent out-of-pocket, not the amount you had coverage for with the home warranty.
Please make sure to keep all receipts of the purchase and labor done to install the product.
To report in TurboTax: Go to deductions and credits, within the home section go to home energy credits. Then enter the amount paid out of pocket for the AC unit. It may be possible to claim that $500 as a credit, as long as the AC unit has the energy efficiency requirements.
Here is a TurboTax article, and other links within it, that discuss home energy tax credits: TurboTax Home Energy Credits
