hvac tax credit

Important Tax Credit Information for Energy-Efficient HVAC and Heating Improvements

We wanted to inform you about a valuable opportunity to save on your energy-efficient home improvements. If you make qualified improvements to your home after January 1, 2023, such as installing new HVAC systems, heat pumps, water heaters, or central air conditioning, you may be eligible for a tax credit of up to $3,200 per year through 2032.

Here’s a summary of what qualifies and the credit amounts:

Eligible Improvements:

  • Central Air Conditioners
  • Heat Pumps (electric or natural gas)
  • Heat Pump Water Heaters
  • Furnaces & Boilers (natural gas, propane, or oil)
  • Water Heaters (natural gas, propane, or oil)

Credit Breakdown:

  • Up to $1,200 annually for energy property costs, which includes certain HVAC improvements.
  • Up to $2,000 per year for qualified heat pumps, biomass stoves, or biomass boilers.

Key Details:

  • The credit covers 30% of qualified expenses for eligible improvements.
  • Labor costs related to installation may be included for some systems, such as heat pumps and furnaces.
  • There is no lifetime limit—you can claim the credit each year through 2032 for new improvements.
  • The credit is nonrefundable, meaning it can reduce your tax liability but won’t result in a refund if the credit exceeds your taxes owed.

Who Qualifies:

  • The credit applies to improvements made to your primary residence located in the U.S. (second homes and rental properties do not qualify).
  • If you use part of your home for business, a portion of the credit may still apply.

To claim the credit, you’ll need to file Form 5695 with your tax return. Be sure to keep receipts and any required documentation for the improvements you make.

If you’re thinking about upgrading your HVAC or heating system, this is a great time to take advantage of these potential savings!

Feel free to reach out if you have any questions or would like more information on energy-efficient HVAC solutions. We’re happy to help you get the most from this tax credit.

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Read more about this tax credit on the IRS website:

Energy Efficient Home Improvement Credit

$50 OFF COUPON ON REPAIRS
$100 OFF NEW INSTALLATIONS