To combat increasing energy expenses and embrace sustainability, many homeowners are trying new methods to maintain comfort levels while using less energy. As part of the Inflation Reduction Act, federal tax credits are available for upgrading to more efficient HVAC systems, such as air conditioners. These credits offer significant savings, as long as the homeowners work with qualifying equipment and submit the appropriate form.
If you’re trying to avoid a long process, we’re offering to help! Paniccia Heating & Cooling hopes this guide will give you everything you need to earn these HVAC tax credits in 2024. Here’s how to make it happen.
Understanding the HVAC Tax Credits
These valuable tax credits for upgrading your home to be more energy-efficient are just one portion of the recent Inflation Reduction Act. Energy costs affect everyone, so helping homeowners upgrade to higher efficiency utilities can benefit everyone. The main intention of these credits is to help pay for high efficiency HVAC equipment and other projects. The two we’ll cover are the Residential Clean Energy Credit and the Energy Efficiency Home Improvement Credit.
But keep in mind, to claim your credits, you’ll need a completed IRS Form 5695. Additionally, this form is submitted within the same tax year your upgrades were installed, not bought.
Maximizing Savings with the Energy Efficiency Home Improvement Credit
Through 2032, the Energy Efficiency Home Improvement Credit provides up to $3,200 annually for energy-efficient home upgrades. This amounts to 30% of the total project’s cost. You should be aware that in order to receive the maximum amount, you’ll have to make several investments. For example, you’ll get up to $2,000 for installing a higher efficiency heat pump. This can be paired with an additional $1,200 in credits for more projects in the tax year.
While new heat pump systems are a popular option for the tax credit, other HVAC upgrades like efficient furnaces and air conditioners also qualify. You’ll need to confirm the make and model’s energy efficiency rating is high enough for eligibility.
Exploring the Residential Clean Energy Credit
The Residential Clean Energy Credit provides 30% savings on a number of other residential clean energy efficiency projects. Eligibility only applies to homeowners seeking to update existing or newly constructed homes. While the Home Improvement Credit highlights utilities and HVAC systems, this credit targets renewable energy sources like solar and wind energy.
Some key details of this tax credit include the requirement that installation must occur between 2022 and 2032. But at the same time, homeowners can carry forward excess credit to offset future tax obligations. This is a great way to make things a little easier when investing in renewables.
Additional Qualifications for Energy Tax Credits
Because HVAC systems are one of the major reasons for high energy bills, these tax credits can guide you to the most energy-efficient options. But home energy efficiency can be improved in many other ways. Apart from the previously listed HVAC upgrades, {you could also choose|other eligible items include|you also have access to:
- Heat pump water heaters
- Modern electrical panel improvements
- Upgraded electrical wiring
- Insulation, air sealing and ventilation enhancements
- High-efficiency electric stoves, cooktops, ranges or ovens
- Heat pump clothes dryers
- Water boilers
Like the HVAC systems, you’ll need to check that your chosen products meet the eligible energy efficiency ratings.
Three Tips for Making the Most of 2024 HVAC Tax Credits
While any of these upgrades can boost home energy efficiency, some planning ahead will ensure more long-term benefits. Maximize your HVAC tax credits with the following three tips:
- Perform an energy audit to pinpoint valuable enhancements. Rely on professional HVAC assessments for crucial advice.
- Install new high efficiency windows and doors.
- Explore potential rebates from utility companies for clean energy upgrades. Renewable sources like solar, wind, and geothermal contribute to community power grid sustainability.
- Don’t forget financing options from local service companies, which can help reduce costs even more.
Paniccia Heating & Cooling Can Help You Secure HVAC Credits for 2024
Partner with local HVAC professionals like Paniccia Heating & Cooling for eligible serves like energy assessments or new installation. Our seasoned installers know how to provide all you need for home energy efficiency upgrades.