I should actually put in the entire sentence to help the context. "You may be able to take these credits if you made energy saving improvements to your home located in the United States in 2007. For credit purposes, costs are treated as being paid when the original installation of the item is completed, or in the case of costs connected with the construction or reconstruction of your home, when your original use of the constructed or reconstructed home begins." So, the house was 'constructed' in 2006/2007 and we started using in in 2007. How does that not fit the criteria above?

Lara a few months ago John Markman wrote a piece on MSN's Money Central which led people to believe that these were not tax credits but tax cuts. Not so says the IRS and the Bush Energy Bill. You really need to do a little homework here beginning with Energystar.gov, entering your zip and finding rebates and incentives in your area. Many of the local incentives don not make their mark on the website, in this case go to your local utilites and check for rebates and incentives. I found one on Keyspan Gas for $300 for my new Bosch Wall mounted tankless hot water heater. Combine that with the tax break, and I'm only out the flue and gas hookup. Windows are $10/ea, not certain about doors. Solar PV and Hybrids are currently $4000.

The Tax credit is 30% up to a maximum of $1500 for new or upgraded H/C equipment. The real question is this if it will read for each piece of equipment or a total for the tax year regardless if you have one or both pieces of equipment replaced/upgraded ? Its in the Stimulas bill somewhere around page 435 - 600, the furnace needs to be a minimum of 95% or 96% AFUE and AC/HP need to have a minimum Seer of 14 and a eer of 141/2 or 15 with a HSPF of 8.5 or greater which basically means your going to have to have the highest effcient equipment installed to meet the quailifcation.

It is clear that you understand that the tax credit is , in fact, real money ( as you pay taxes)- albeit you don't realize it until April 15, 2011. As to 'taking money from the gov't'.. I view it as 'keeping more of your own money'.. Especially when all the incredible wasteful spending and idiotic programs benefit very very few tax paying individuals. It should be borne in mind that it is gov't regulations requiring the switch from R22 that is causing homeowners to bear a huge cost to replace whole systems versus repairing existing systems ( due to incompatibility of outdoor/indoor units - R22 vs. R410A). Individuals are bearing an enormous cost to 'save the planet'. Given the track record of current administration, I find it doubtful that they will renew the existing tax credit program. At some point, people will realize that money is not free and one should not discount that many of these programs are political in nature and eventually politics runs its' course and they move on. Whether it is worthwhile program could be debated - but won't change the facts that it is there and in place- now. Once allocated funds are exhausted it will end or any excess monies will go to some other program Given the age of your systems - I think it is clearly a case of 'pay me now' or 'pay me later' with the caveat that if take the former- you get an overall reduced cost and a new upgraded system that extends the life ( and reduction of future expenditures) of your home. If anyone would guarantee another 10-15 years on your existing system, I would have another opinion, but I think it is reasonable to assume that the life of your current system is at the top of range of its' life expectancy.