Federal Tax Credits for HVAC Upgrades in 2021
Did you invest in a new HVAC system in 2021? If so, you may qualify for federal tax rebates. Yet you need to know how to get them. Here’s the information you need to know before you file your income taxes this year, so you can get the full credit for your new HVAC installation.
What Are the Tax Credits?
For qualified HVAC improvements you made to your home in 2021, you may be eligible for 25c tax credits. These equal 10% of the installation costs. You can get up to $500 in money back for making an upgrade to your HVAC system this past year.
This tax credit is part of the non-business energy property tax credit program. It was created to inspire homeowners to choose energy-efficient improvements, including HVAC and water-heating equipment. This credit is given on personal tax returns, meaning it reduces the tax liability dollar-for-dollar.
This system became part of the tax code as part of the Energy Policy Act of 2005, and since then, it has been expended several times. December 31, 2021, is the official end date unless Congress decides to extend it again.
How to Qualify for the Energy Tax Credit
If you’re interested in applying for the energy tax credit, you don’t need to do much. You can get 10% of the value of your HVAC system or a specific amount between $50 and $300 to offset your tax liability.
For your HVAC system to qualify, it must fulfill specific criteria, including a SEER of greater than 16 for an air conditioning system and an AFUE of greater than 95 for a furnace. For heat pumps, if the SEER is 15 or higher, you may also qualify for a rebate.
Systems that meet these qualifications will carry the ENERGY STAR® certification, which shows that it qualifies for the tax rebate. In addition, you can only claim this tax credit once, even if you’ve upgraded your systems more than once since the program started in 2005.
How to Claim the Credit
To claim the credit, you need a copy of the manufacturer’s certification statement so you can prove the energy efficiency. Then, when you file your taxes, use IRS Form 5695. Download the form from the IRS website, then complete all appropriate sections. Keep in mind that you might still need to fill in more than one line if you picked a packaged system.
Let Signature HVAC Help With Your Energy-Efficient Tax Rebates
If you installed a new HVAC system with our help this year, now’s the time to get your information organized for your taxes. Signature HVAC can help. Contact us today to learn more about how you can use this program to get some money back on your taxes.
Contact Signature HVAC for help with your HVAC needs in West Chester or to learn more about the energy-efficient tax credit program and see if your new HVAC qualifies.
