To combat increasing energy expenses and embrace sustainability, many homeowners are looking for ways to enjoy the same standards of comfort while reducing utility bills. Included in 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 choose eligible equipment and submit the right paperwork.
If you’re trying to avoid a long process, maybe we can help! Enertek Air Conditioning & Heating hopes this guide will give you what you need to secure 2024’s HVAC tax credits. Here’s how to make it happen.
How Do These Tax Credits Work?
These valuable tax credits for energy-efficient home improvements are just one intended use 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 mitigate costs associated with installation and renovation projects. The two we’ll cover are the Energy Efficiency Home Improvement Credit and the Residential Clean Energy Credit.
However, to apply for the credits, you’ll need to fill out IRS Form 5695. Additionally, this form has to be submitted for the same tax year any upgrades were installed, not bought.
Energy Efficiency Home Improvement Credit
Through 2032, the Energy Efficiency Home Improvement credit empowers homeowners by offsetting up to $3,200 each year for installing higher efficiency home upgrades. This can be up to 30% of the total project’s cost. You should be aware that in order to get back the maximum amount, it means making severel investments. For example, you’ll receive up to $2,000 for high efficiency heat pump systems. This can be combined with the remaining $1,200 in credits for other eligible upgrades made within the tax year.
While new heat pump systems are a great use of the program, other HVAC upgrades like efficient furnaces and air conditioners also qualify. You should confirm that your choice’s energy efficiency rating is high enough for eligibility.
Exploring the Residential Clean Energy Credit
The Residential Clean Energy Credit amounts to roughly 30% savings on a variety of residential clean energy efficiency projects. Eligibility is only extended to homeowners looking for new clean energy solutions for their home. While the Home Improvement Credit highlights utilities and HVAC systems, this credit is more about renewable energy sources like solar and wind energy.
Some provisions of the tax credit include the requirement that installation must occur between 2022 and 2032. But at the same time, homeowners can keep the excess credit to reduce future taxes. This is a great way to make things a little easier when investing in renewables.
What Else Is Eligible for These Tax Credits?
Because HVAC systems are one of the biggest portions of your monthly energy costs, these tax credits incentivize 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
- High-efficiency water boilers
Just like with installing one or more HVAC systems, you’ll need to verify that your preferred make and model features the eligible energy efficiency ratings.
Maximizing Your 2024 HVAC Tax Credits: Top 3 Tips
While any of these upgrades can improve your home’s energy efficiency, some planning ahead will ensure the best chance at more long-term benefits. Maximize your HVAC tax credits with these 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.
- Look into rebates for clean energy projects from utilities. 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.
Secure Your 2024 HVAC Credits with Help from Enertek Air Conditioning & Heating
Partner with local HVAC professionals like Enertek Air Conditioning & Heating for help with home energy audits and new installation projects. Our seasoned installers can deliver whatever you need for home energy efficiency upgrades.
