Energy Efficient Improvements for Air Conditioner

[sand07]

I have a new packaged air conditioner that includes a new gas furnace too. 

Do I claim this on multiple fields or just one and which one would I choose? There are 3 applicable fields for this information

Energy-Efficient Building Property

Advanced Main Air Circulating Fan

Furnaces and hot water boilers

[MinhT1]

This one appliance can only benefit from one tax credit. And you should choose the one that gives you the best tax break.

[Opus 17]

You can list your HVAC upgrade in all 3 places IF you can get an itemized breakdown from your contractor.  And each item has to meet the specific energy efficiency requirements for that type of item.  If you aren't sure, you will have to ask the installer or manufacturer.

The credit for an efficient air conditioner is 10% up to $300.  The standard is "A central air conditioner that achieves the highest efficiency tier that has been established by the CEE as in effect on January 1, 2009."

The credit for an efficient furnace is 10% up to $150.  A gas furnace must have an annual fuel utilization rate (AUFE) of at least 95. 

The credit for a circulating fan is 10% of the cost up to $50.  The standard is "advanced main air circulating fan used in a natural gas, propane, or oil furnace that has an annual electricity use of no more than 2% of the total annual energy use of the furnace (as determined in the standard Department of Energy test procedures)."

The overall lifetime maximum credit is $500, so if you have previously claimed other improvements, your current credit will be reduced or limited. 

[sand07]

thank you both. I think I'll go with the safe option of choosing one. $300 credit sounds nice too.  I didn't know that option was for air conditioners. Sure beats the $150 or $50 options.

[Opus 17]

@sand07 

You still need to be careful here if you don’t have an itemized invoice. Suppose the entire package cost $4000 and you list it all as an “air conditioner” and claim a $300 credit. If you are audited by the IRS, they will ask you to prove that the air conditioner portion was really worth $3000 in order to claim the maximum credit.  You have the burden of proving every deduction and credit you claim, and deductions and credits can be disallowed if you have the bad luck to be audited and you can’t prove them to the satisfaction of the examiner.  

The credit is not for a “system.”  The credit is specifically for an electric powered air conditioner, a gas or oil or biomass fired furnace, and an advanced circulating fan.  (if your system is a heat pump, that has a $300 credit and cannot be broken into heating and cooling portions, but since you said furnace and AC, I assume you know what you are talking about.)