They’re back! As part of the so-called fiscal cliff deal signed into law on January 2, tax credits are now available for specific energy-efficient home improvements, including a variety of HVAC installations. Through a program that’s commonly referred to as Federal Tax Credit 25C, homeowners can receive up to a $500 credit on their federal tax returns for qualified equipment installed in either 2012 or 2013.
A Bit of Tax Incentive Background
Tax credits for energy improvements first became available through the Energy Policy Act of 2005 and were limited to installations made in 2006 and 2007. At the start of the economic downturn in 2008, the credits were reinstated and were subsequently renewed each year through 2011. The incentive program expired at the end of that year.
The American Taxpayer Relief Act of 2012 reinstated the Federal Tax Credit 25C program, making it retroactively effective from January 1, 2012, to December 31, 2013. Homeowners in Marco Island FL can now enjoy discounts for energy-efficient HVAC and water heating installations. Qualifying equipment is listed in the Federal Tax Credit 25C Section of the Internal Revenue Code.
HVAC Equipment Qualifications
To qualify for the tax credit, equipment must meet specified energy-efficiency standards as established by the Consortium for Energy Efficiency (CEE) in 2009. You can recognize which products are eligible by looking at the ratings on the product’s label. These ratings determine the equipment’s efficiency by comparing the energy that they consume with the heating or cooling that they deliver. The higher the rating, the better the energy efficiency.
The primary rating systems are:
- Heat Pumps: Heating Seasonal Performance Factor (HSPF)
- Air Conditioners: Seasonal Energy Efficiency Ratio (SEER)
- Furnaces and Boilers: Annual Fuel Utilization Efficiency (AFUE)
Heat Pumps and Air Conditioning Systems
You can receive up to a $300 tax credit for qualified air conditioners and heat pumps. Rating qualifications vary according to the type of equipment and technology.
- Electric heat pumps: 12 HSPF or higher
- Split system heat pumps: 8.5 HSPF or higher
- Central air conditioning systems: 14 SEER or higher
- Split system air conditioner: 16 SEER or higher
- Geothermal Heat Pumps
Because geothermal heat pumps qualify for the more-generous residential renewable energy tax credit that can pay for as much as 30 percent of installation costs, this equipment is no longer eligible for the 25C energy-efficient tax credit.
Furnaces and Boilers
Fuel-burning furnaces and boilers with an AFUE rating of not less than 95 percent qualify for a $150 tax credit.
Energy-efficient water heaters may qualify for a tax credit of $300. Fuel-burning water heaters must have an AFUE rating of at least 90 percent. Electric heat pump water heaters must have an energy factor of at least 2.0.
Our professional HVAC technicians are familiar with all the details that you need to know to claim the Federal Tax Credit 25C in Marco Island FL. As your neighborhood HVAC provider, Accurate Comfort Services, Inc. is committed to providing products and services that not only save your money but that offer optimal performance and comfort too.