Tax Breaks for Energy-Efficient Home Improvements

You might qualify for a tax credit if you install an eligible central air-conditioning system this year.

Can I get a tax credit for installing a new central air conditioner?

Maybe. Last year’s stimulus law expanded the tax credits for energy-efficient home improvements and extended the credit for 2009 and 2010. If you install an eligible central air-conditioning system in your principal residence before December 31, 2010, you could qualify for a tax credit worth 30% of the cost of the air-conditioning system and installation, up to a $1,500 maximum. Because it is a tax credit, it lowers your tax bill dollar for dollar.

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Kimberly Lankford
Contributing Editor, Kiplinger's Personal Finance

As the "Ask Kim" columnist for Kiplinger's Personal Finance, Lankford receives hundreds of personal finance questions from readers every month. She is the author of Rescue Your Financial Life (McGraw-Hill, 2003), The Insurance Maze: How You Can Save Money on Insurance -- and Still Get the Coverage You Need (Kaplan, 2006), Kiplinger's Ask Kim for Money Smart Solutions (Kaplan, 2007) and The Kiplinger/BBB Personal Finance Guide for Military Families. She is frequently featured as a financial expert on television and radio, including NBC's Today Show, CNN, CNBC and National Public Radio.