SECTION 5. QUALIFIED ENERGY

PROPERTY

.01 Under ARRTA, qualified energy property for a taxable year beginning after December 31, 2008, is property that is placed in service on or before February 17, 2009, and is described in section 2.03(2) of this notice or property that is placed in service after February 17, 2009, and is described below:

(1) Electric Heat Pump Water Heater . An electric heat pump water heater described in section 2.03(2)(a) of this notice (ARRTA did not change the efficiency standard for an electric heat pump water heater).

(2) Electric Heat Pump . An electric heat pump that achieves the highest efficiency tier established by the Consortium for Energy Efficiency, as in effect on January 1, 2009.

(3) Central Air Conditioner . A central air conditioner that achieves the highest efficiency tier established by the Consortium for Energy Efficiency, as in effect on January 1, 2009.

(4) Natural Gas, Propane, or Oil Wa- ter Heater . A natural gas, propane, or oil water heater that has an energy factor of at least 0.82 or a thermal efficiency of at least 90 percent. (5) Biomass-Burning Stove . A biomass-burning stove described in section 2.03(2)(e) of this notice (the retroactive clarifying change ARRTA made to the efficiency standard for a stove that burns biomass is reflected in section 2.03(2)(e)).

(6) Natural Gas Furnace . A natural gas furnace described in section 2.03(2)(f) of this notice (ARRTA did not change the efficiency standard for a natural gas furnace).

(7) Natural Gas Hot Water Boiler . A natural gas hot water boiler that achieves an annual fuel utilization efficiency rate of not less than 90.

(8) Propane Furnace . A propane furnace described in section 2.03(2)(f) of this notice (ARRTA did not change the efficiency standard for a propane furnace).

(9) Propane Hot Water Boiler . A propane hot water boiler that achieves an annual fuel utilization efficiency rate of not less than 90.

(10) Oil Furnace . An oil furnace that achieves an annual fuel utilization efficiency rate of not less than 90.

(11) Oil Hot Water Boiler . An oil hot water boiler that achieves an annual fuel utilization efficiency rate of not less than 90. (12) Advanced Main Air Circulating Fan . A fan described in section 2.03(2)(g) of this notice (ARRTA did not change the efficiency standard for a fan).

.02 Installation Costs . For qualified energy property, the credit is allowed only for amounts paid or incurred to purchase qualified energy property and for expenditures for labor costs properly allocable to the onsite preparation, assembly, or original installation of the property.

.03 Natural Gas, Propane, or Oil Fur- nace with an Advanced Main Air Circu- lating Fan . If a natural gas, propane, or oil furnace is qualified energy property, the entire amount paid or incurred to purchase and install the furnace, including any costs attributable to the furnace’s main air circulating fan, are taken into account in determining the amount of the credit under § 25C. If the furnace is not qualified energy property, but the furnace’s main air circulating fan is qualified energy property, only the amount paid or incurred to purchase and install the fan are taken into account in determining the amount of the credit under § 25C. In such a case—

(1) The amount paid or incurred to purchase and install the main air circulating fan may be determined by any method that reasonably allocates costs between the fan and other components of the furnace;

(2) The manufacturer of the furnace may determine, using any reasonable method, the percentage of the cost of the furnace that is allocable to the fan and inform taxpayers of the percentage in the certification it provides under section 6 of this notice; and

(3) A taxpayer may treat this percentage of the total amount paid or incurred to purchase and install the furnace as the amount paid or incurred to purchase and install the advanced main air circulating fan.

.04 Geothermal Heat Pump Property . The credit under § 25D for geothermal heat pump property expenditures in taxable years beginning after December 31, 2007, is described in Notice 2009–41, 2009–19 I.R.B. 933.

June 22, 2009 1098 2009–25 I.R.B.

(1) Under § 7206 for fraud and making false statements; and

(2) Under § 6701 for aiding and abetting an understatement of tax liability (in the amount of $1,000 per return on which a credit is claimed in reliance on the certification).

.09 Availability of Certification Infor- mation . Manufacturers are encouraged to provide a listing of eligible building envelope components and qualified energy property and applicable certification information on their websites to facilitate taxpayer identification of qualified components and energy property.

.10 Special Rule for Energy Star . The Energy Star label designates that the product has met energy efficiency guidelines set by the EPA and the DOE. Not all Energy Star labeled building envelope components qualify for the tax credit under § 25C. The component must meet the definition of an eligible building envelope component in § 25C. Taxpayers can no longer rely on an Energy Star label in claiming the § 25C credit for exterior windows and skylights placed in service after the enactment of the ARRTA. Similarly, an Energy Star label does not establish that a product is qualified energy property. The product must meet the definition of qualified energy property in § 25C.