TAX CREDITS & UTILITY REBATES

Who's Down With Upgrades?

Have you been considering upgrading to a newer and more energy-efficient heating and cooling system?

Maybe you have been hesitating due to the cost, but we are pleased to tell you that incentives are available to help offset that expense! As an American homeowner, you may be eligible for tax credits and rebates that will help you reduce your overall energy consumption and save on utility costs. If you have an outdated and inefficient heating and cooling system it will work harder leading to higher utility bills.

If you’re ready to learn more about the benefits of installing an energy-efficient HVAC system contact us at 812-510-HVAC.

Federal Tax Credits for Homeowners

The Inflation Reduction Act (IRA) of 2022 provides American home owners with incentives to make energy efficient upgrades to their homes. These HVAC tax credits are available for qualifying energy-efficient improvements from January 1, 2023 through December 31, 2032. These credits are applied towards your taxes owed, which can help offset the costs associated with installing new heating, ventilation and air conditioning systems.

Central Air Conditioner Installation

Tax credit of 30% of the project costs
Up to $600

Electric Heat Pump Installation

Tax credit of 30% of the project costs
Up to $2,000

Natural Gas Furnace,  Oil Furnace, or Boiler Installation

Tax credit of 30% of the project costs
Up to $600

There is a maximum credit of $3,200 allowed that you can claim per year which breaks down as follows:

$2,000 per year for qualifying heat pumps
$1,200 for energy property costs and certain energy efficient home improvements, including a $250 limit per door ($500 total), a $600 limit for whole home window installations and a home energy audit of $150.

There is no lifetime limit for these federal tax credit benefits, meaning you can use the full annual credit allowed every year through the end of 2033. These tax credits are non-refundable, so you can’t get back more on the credit that you owe on your taxes. Excess credit can’t be applied to future tax year. To apply for the Energy Efficient Home Improvement Tax Credit you must complete and file an IRS form 5695 with your tax return. The claim must be submitted for the same tax year as the installation occurred.

There is no lifetime limit for these federal tax credit benefits, meaning you can use the full annual credit allowed every year through the end of 2033. These tax credits are non-refundable, so you can’t get back more on the credit that you owe on your taxes. Excess credit can’t be applied to future tax year. To apply for the Energy Efficient Home Improvement Tax Credit you must complete and file an IRS form 5695 with your tax return. The claim must be submitted for the same tax year as the installation occurred.

Utility Rebates for Homeowners

Rebate programs also exist through local utility companies that may offer additional incentives for homeowners to upgrade their HVAC systems. If you have been on the fence about upgrading to a more energy-efficient heating and cooling system these additional rebates might be the answer! See below for more information.

https://www.clarkremc.coop/energy-efficiency/rebates/hvac-rebates/

Disclaimer: Black Diamond Heating and Air is not a licensed tax professional and the information provided here is for general information purposes only. Tax credits and utility rebates are subject to change and since each persons circumstance may vary, it is highly recommended to seek tax guidance from an expert. To find more information about the Energy Efficient Home Improvement Credits visit https://www.irs.gov/credits-deductions/energy-efficient-home-improvement-credit to learn more.