HVAC Tax Credit
HVAC Tax Credit - Trane Energy Star Air-Conditioning
Tax credits offered by the federal government for making energy efficiency improvements to your existing home have been reduced from recent years, but there are some tax credit incentives available out there. Making our new and existing homes as environmentally sustainable as possible should be a top criteria for us all, and these tax credits help reduce the cost to the homeowner.
One of the major users of energy in any home is the heating and cooling system. Installing new, energy efficient HVAC systems can greatly reduce a home's energy use and cost.
Requirements to Qualify for a 2011 HVAC Tax Credit
For any HVAC equipment to qualify for the 2011 tax credit, it must be installed during 2011 (by Dec. 31, 2011) and be for an existing primary residence only.
Central Air Conditioning
Central air conditioning systems qualify for a $300 tax credit in 2011, which includes installation costs.
- Split systems must have energy ratings of EER >= 13
- SEER >=16
- Package systems must have ratings of EE>=12
- SEER >=14
The tax credit includes installation costs. You may need to replace both the heating and cooling systems to qualify for the tax credit because today's air conditioning units need the added efficiency from an efficient blower motor to reach the tax credit efficiency level. If you have a newer furnace with an advanced main circulating fan, it may be possible that a new air conditioner could qualify with the existing furnace. If both heating and cooling systems are replaced, they must be from the same manufacturer to get the required certification proving your system qualifies for the tax credit.
Electric Heat Pumps
Electric heat pumps qualify for a $300 tax credit in 2011. The efficiency requirements for a split system are as follows:
- Split Systems: HSPF >= 8.5; EER >= 12.5;
- SEER >= 15
- Package Systems: HSPF >= 8; EER >= 12;
- SEER >= 14
The HVAC tax credit includes installation costs.
Furnaces and Boilers
New furnaces and boilers qualify for a $150 tax credit in 2011. The efficiency requirements are as follows:
- Natural Gas or Propane Furnace: AFUE >= 95
- Oil Furnace: AFUE >= 90
- Gas, Propane, or Oil Hot Water Boiler: AFUE >= 90
The credit for furnaces and boilers includes installation costs.
Advanced Main Air Circulating Fan
Main air circulating fans are eligible for a $50 tax credit in 2011.
The efficiency requirement for main air circulating fans is that they must use no more than 2% of the furnace's total energy use. If the fan qualifies for the tax credit but the furnace doesn't, you can get a 30% tax credit on the cost of the fan alone.
Not all Energy Star HVAC products qualify for this tax credit, only products meeting the minimum efficiency requirements listed above. For definitions of these efficiency standards, see our glossary of terms .How to Claim Your 2011 Energy Tax Credit
For efficiency tax credits, you will need to fill out IRS Form 5695 and include it with your 2011 income tax returns by April 15, 2012.
Save all receipts (or have copies made) and the Manufacturer Certification Statement from each qualifying product for your records. A reputable contractor will be able to assist you with the manufacturer certification statement, and also help you navigate the ins and outs of any and all current tax credits and other rebates that may be available.
Important Information For The HVAC Tax Credit
These 2011 energy tax credits are non refundable; they are only available to the extent you have a tax liability. They may be claimed only once and are limited to the year in which the item is purchased and installed. If you claimed a home energy improvement tax credit on your 2010 taxes, you may not take an additional credit for the same purchase in 2011.
The 2011 energy tax credits that expire in December 2011 have a $500 lifetime limit. If you have received a total of $500 or more in these tax credits from 2006 to 2010, you will not be eligible for any more.
As always, consult with your income tax preparer to make sure all information is compiled and filled out correctly.
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