Federal Tax Credits For High-Efficiency Systems: They're Back And Even Retroactive

As a result of the so-called Fiscal Cliff legislation on New Year’s Day, federal tax credits for a wide range of energy-efficient HVAC equipment that expired at the end of 2011 have been reinstated. Even better news is that they cover both purchases in 2013 and retroactively to 2012. Learn how the 25C federal tax credits work, and what types of equipment qualify.

The birth of tax credits for high-efficiency HVAC systems

Originally established in 2009, the American Recovery and Reinvestment Act (ARRA) outlined generous tax credits — not deductions — for high-efficiency HVAC products such as heating systems, air-source and ground-source heat pumps, air conditioners, water heaters, windows and more. The original tax credits expired at the end of 2011 for all HVAC equipment, except for alternative energy sources such as solar and geothermal, which expire in 2016.

The rebirth of tax credits

As a result of the Fiscal Cliff agreement, homeowners can now take advantage of these federal tax credits again. Here’s a look at the criteria, efficiency ratings qualifications and product categories:

The total amount you can claim for any individual tax credit is $500, though most of them are lower than that ($150 for a high-efficiency natural gas furnace, for example).
To apply for the credit, you’ll need the receipt for the purchase, as well as the Manufacturer’s Certification Statement to confirm the system’s efficiency.
The tax credits apply to some other products, such as insulation and energy-efficient doors or windows, as well as HVAC equipment.

You’re eligible for the tax credits if your A/C or heat pump meets these minimum guidelines:

Central air conditioning: Seasonal Energy Efficiency Ratio (SEER) 16 and Energy Efficiency Ratio (EER) 13
Air-source heat pump: SEER 15, HSPF 8.5 and EER 12.5
Advanced main air-circulating fan: The fan’s energy consumption should be no more than 2 percent of the overall energy the system consumes.
Of less import for our area, high-efficiency furnaces also qualify if they have an Annual Fuel Utilization Efficiency (AFUE) of 95 percent or higher.

At NisAir Air Conditioning & Heating, we’re happy to help our neighbors with a high-efficiency HVAC upgrade and installation. We can also help you navigate the federal tax credit criteria. Give us call today or visit our website for more information. We serve homeowners in Martin, Palm Beach and Indian River counties.