Tax credit for energy efficient improvements tucked into fiscal cliff legislation

CLEVELAND - Tax time is fast approaching, and this filing season some taxpayers will get a bigger refund than expected.

A tax credit for energy efficient improvements was tucked into the fiscal cliff legislation, and contractors are reaching out to homeowners to alert them about the unexpected savings.

Sue Willman is starting the new year off with a new heating and cooling unit. She planned to pay one price, but recently learned it will be cheaper than expected.

"I think it's a bonus. I'm glad now we're having this done and get the tax credit on top of it," Willman explained.

Congress reinstated the energy efficient tax credits that expired in 2011 and made them retroactive to include purchases in 2012.

Energy efficient improvements to doors, windows, insulation or heating and cooling systems qualify for the money. The tax credit is valued at 10 percent of your purchase or up to $500 of the cost of most new energy efficient improvements.

If you qualified in the past, you may not qualify this time around as the credit is capped at $500. Qualifying boilers and air furnaces will get you $150. Air conditioners, heat pumps and water heaters qualify for $300.

"It is going to be a logistics nightmare for a lot of different companies I believe," Apple Heating & Cooling comfort consultant Rick Crowell said.

Crowell's company is going through its files from last year to find all the customers who bought qualifying products. It's estimated this small company will have to reach out to 250 people all before tax season starts.

"It's a pretty big burden but hey, our people are going to get some money back so we are happy about that," Crowell explained.

Willman is all smiles. She'll save money with her newer energy efficient heating and cooling system -- and she'll save on her taxes too.

"Sometimes the unexpected is more pleasant than when you plan on something."

For a list of qualifying products, check out the Air-Conditioning, Heating and Refrigeration Institute and Alliance to Save Energy: http://5.wews.com/gSnjK.