If you read the form "Nonbusiness Energy Property Credit You may be able to take a credit of 30% of the costs paid or incurred in 2009 for any qualified energy efficiency improvements and any residential energy property. The credit is limited to a total of $1,500 for tax years 2009 and 2010" The people that just filled in $1,500 for the credit may be asked to provide additional documentation as tax forms are reviewed. You can take the chance of IRS catching the error or do it correctly the way your accountant tells you. I say bravo for the accountant. If you paid $5,000 for the system you might be able to claim the full amoung.

"We had three nights that went to 31 or 32F this winter. VERY unusual for us being close to the bay. It rarely gets below 45F." Well within operating limits of a heat pump; some are operated even below that. I honestly think a heat pump with no gas furnace is your best option, with gas prices on the rise as you mention (who says electric rates won't climb too, though). You can have electric heat strips as backup in the air handler, which is standard with heat pumps. I'm still questioning the 3 tons. You need a heat loss calculation done (and heat gain) to determine what size you need. My fear is that you go with the 3 ton heat pump and you never even use the furnace for heat because you don't need it, which would be a total waste. It looks like the other quote actually has a clue how to size systems. 1.5-2 ton would be my guess on sizing, maybe 2.5 if heating is the big concern. Again proper calculations need to be done--not easy to find a guy to do this. You'll have to call around and say upfront you only want them for the job if they'll do the load calculation. 95% AFUE will get you the tax credit as will 15 SEER/12.5 EER/8.5 HSPF for heat pumps. See below link. AHRI rates all these systems, and now they have a column to mark whether the setup qualifies for the tax credit. Don't be too specific with the model numbers in entering them, since sometimes that will return no result. Also some matchups are just for the coil and heat pump/air conditioner if the furnace is not variable speed and will not impact ratings (as in the Rheem setup quoted above, so in that case you'd just search RPPL-036 heat pump and RCFL coil and should get the ratings you need). Let me know if you need help working around the database. I'll stop throwing all this info at you for now. :-)

I have used HR Block on line for years..Think it cost 30 dollars or so and its a hand holding simple walk you thru it, read carefully and fill in the blanks. Its free to do it until you go to file and that is when you pay. I dont even have to enter our basic information anymore..Its all saved..of course it gives you the chance to change anything that might need to be changed..ie when our daughter got married and we could no longer claim her. Give it a try!

sue36 I live in the Deep South, where people buy steak with food stamps and drive off in BMWs. I find it very hard to justify welfare when too many people (generations) have lived off it. Welfare should have a 6 (maybe 9) month maximum, mandatory drug testing, and a requirement of 5 resumes sent out a week. After that, people should have to suck it up and take a job they are over qualified for, even if it is bagging groceries. If you can't afford children without being on welfare, then you should buy birth control. (You should NOT have a child just to increase your paycheck.) All that may sound mean, but you and I are paying for people to be lazy and irresponsible. Well that and the war. . . . and interest on our ballooning national debt. As far as the rebate goes... It seems kind of irresponsible, but I guess it will be fun to have a little extra cash. I'm going to be using mine for a house down payment. (think the feds would be happy to hear that.)