If you’re like many homeowners facing the reality of HVAC system replacement, you probably have wondered if there are any tax incentives. The answer is yes.
In January 2020, Congress renewed the Non-business Energy Property Tax Credit or Section 25C of the tax code. This means that you can get up to $500 in tax credits when you install any energy efficient (Energy Star-certified) air conditioner, heater, boiler or other HVAC appliance. To obtain the tax credit, you’ll need to fill out IRS Form 5695. The energy efficiency tiers are determined by the Consortium for Energy Efficiency with a standard air conditioner unit obtaining a $300 credit. This credit is only available on a primary residence, not on vacation homes or investment rental properties.
Of course, there are many other benefits to upgrading your HVAC system. These include:
- Lower operational costs
- Greater efficiency
- More advanced technology
- Increased value to your home
- Improved temperature control
- Enhanced indoor air quality
- Peace of mind that your system won’t break down
Consider that the US Department of Energy estimates that over 40 percent of a homeowner’s power bill stems from cooling and heating. The financial gain of upgrading to a new unit is substantial! And the tax credit sweetens the deal even more. It’s also true that you may even be able to claim interest as an itemized deduction if you finance a new HVAC system. A qualifying loan is one that’s taken out to add “capital improvements” to a home. Call us for more details at 623-872-2900.
What about Home Businesses?
If you have a home-based business, you may be able to qualify for even greater tax savings. The costs related to purchasing and installing an HVAC system can be deductible if you can show that the system is an ordinary and necessary expense to operate your business.
Want to learn more about obtaining the greatest value from a new HVAC system? Call the experts at Cool Blew today.