Burnselk, I think the key to your confusion is that the amount of tax you pay after you do your taxes is some fixed number regardless of how much your withholdings are during the year. In other words, there are more than a few ways to come out "even" with the fed after doing your taxes such that you pay nothing and get no refund. 1) During the year, $10000 was witheld from your paychecks and after you do your taxes, it shows you owe $10000 in taxes. Net = 0. You owe nothing and they owe you no refund. 2) During the year, $1000 was witheld and after you do your taxes, it shows you owe $1000 in taxes. Net = 0. You owe nothing and they owe you no refund. In 1) above, the $1500 tax credit would get you a $1500 refund because $1500 is credited against the $10000 in taxes you have to pay resulting in a net of $8500. Since $10000 was witheld, the fed now owes you a $1500 refund. In 2) above, the $1500 tax credit would only get you a $1000 refund because $1500 is credited against the $1000 in taxes you have to pay resulting in a net of -$500. BUT since it is a non-refundable credit, the fed won't let you keep that extra $500 so the taxes you owe are $0 and not a credit of $500. Since $1000 was witheld, the fed now owes you a $1000 refund. Hope this makes sense... an example of a refundable credit is the Earned Income Credit. In that case, in scenario 2 above... you would get to keep the -$500 from the credit and your refund would be $1500. But this is NOT the case with the energy credit. Hope this clears things up a bit...

With #1, your end result is 13.00 SEER, which is the bare minimum. Really a waste of a fine heat pump to put it on a basic furnace without variable speed. You'll get the same efficiency or more (14.00) for less money with a single stage Carrier heat pump. The XP14 will also yield 13.00 SEER and minimum allowed 7.7 HSPF. The XR13 same but with low heating capacity.

Thanks for the quick response, tigerdunes -- I've learned a lot from what you've written in previous posts here in the heating and air forum. One of the sales reps thought our unit was probably builder's grade, as well. That fits with the overall approach that the builder took with our home -- any corner that he could cut, he did cut. If you don't mind, I have a few follow up questions: 1. I understand the basics of what makes the variable speed air handler different from the single speed, but I don't have a good grasp of what the advantages are. I assume that it boosts efficiency, but will that boost translate into enough savings to justify the added cost of $500 or so? 2. Are you a proponent of extended labor warranties on a system like the XR15? For example, I can save $650 if I go with a 2-year warranty over the 10-year. Since we're likely to be in the house for 3-5 years, I'm leaning toward saving the money. 3. I've seen a lot of recommendations for the Trane XL15i. In your mind, would it be worth an extra $500 over the XR15? 4. Finally, the dealer who quoted the Lennox system also sells Trane, but he steered me to Lennox. I wondered if they have a better profit margin on Lennox, but he presented it as more bang for the buck (Trane's more expensive because of advertising, etc.). You clearly prefer Trane, but what are your thoughts on the XP system? Thanks!

tigerdunes - I have learned a lot from reading your postings on this forum and I appreciate your inputs. Your minimum specs list has already been very useful (though a lot of sales people really struggle to find answers about some of the items on that list), and IâÂÂm leaning now toward the XL15i instead of the $660 more expensive XL16i. I still havenâÂÂt completely ruled out Carrier and Rheem, but a neighbor has had a 4-ton Trane XL14i for over three years and I like the way it does not seem to have collected very many of the evergreen needles that are everywhere around here. I am curious though just why the XL16i has so much trouble with dehumidification, and whether that is important to our well-shaded house just outside of Seattle. We havenâÂÂt bothered to run our heat pump in cooling mode for at least the last decade, so I remain mostly concerned with heating performance and expect to use very little cooling. Also, is the XL16i any less reliable that the XL15i, or is it just (as I understand from other forum postings) that it is more complex to hook up and hence more prone to improper installation? I am also puzzled when I compare ARI heating performance of the XL15i and XL16i. At 47 degrees their ARI heat capacity and COP are identical, and at 17 degrees the 15i has only 1% more heat capacity. The 16i has the better 17 degree COP, 2.86 versus 2.82, but it falls down on HSPF to 8.50 versus 9.00 for the 15i. This seems to imply that the 16i spends more time in defrost mode, but I do not understand why. Returning of your spec list, I assume âÂÂstaged backup heat stripsâ refers to the capability to selectively turn on part instead of all of the backup heat? Our old heat pump has this feature, but I have yet to find a sales person who can tell be whether modern systems can do this. One issue is not really relevant until our new heat pump is being installed, but opinions about it are so amusingly diverse I cannot resist asking. Our power utility offers an extra rebate if we install a lockout control. What should it control? We have a lockout set at 32 degrees on our old heat pump and I understood it prevents the backup heat from coming unless the outdoor temperatures is below 32 degrees. The âÂÂenergy expertâ I talked to at our power company agreed, but said the lockout should also turn off the heat pump compressor at 32 degrees to âÂÂprevent a spike in our electric bill.â I recognize efficiency is down at that temperature, but unless there is a lot of icing up it still seems to make sense to run the compressor. Sale personnel were about evenly split whether the lockout should turn off the compressor. Is there any clear answer on this?