Want to take advantage of an HVAC tax rebate? Let the Topline Heating & Air team help when you call (717) 628-6825!
Federal rebate programs incentivize homeowners to switch to more efficient HVAC systems. Under certain specifications, you may be eligible for a tax break for new HVAC installations with high energy-efficiency ratings.
Individuals can claim different tax credits for making changes to their system. However, rates differ depending on when the property owners received new units and whether they are residential or commercial property owners.
For example, the Non-Business Energy Property Tax Credit gives homeowners up to $500 after successfully installing an efficient, Energy Star-rated HVAC unit. Nonetheless, other programs contribute significant additional amounts.
Trust HVAC contractors in Atglen, PA, to perform a detailed, accurate installation. Keep reading to learn the ins and outs of tax breaks for new HVAC installations from our skilled professionals.
How HVAC Installation Tax Credits Work
Unfortunately, getting a complete write-off for HVAC equipment or the entire system is impossible for homeowners. Due to the Tax Cuts and Jobs Act, businesses may get a total write-off. However, residential and non-business tax credits are available depending on your property status.
Individuals will only get tax credits if they fall within the eligibility requirements. New HVAC installation tax credits work similarly to other tax rebate programs:
- Homeowners get energy-efficient HVAC installations and can claim tax deductions.
- They’ll fill out the appropriate form when filing their yearly taxes.
- After they file, the credit applies to the total owed amount.
- Those with tax obligations lower than the credit amount will get a refund.
Types of HVAC Appliances Eligible for Tax Breaks with New Installations
Depending on the energy efficiency and the kind of tax break for new HVAC systems, different appliances’ installations make you eligible. Residential energy tax credits cover geothermal heat pumps and solar HVAC appliances. However, non-business credits cover HVAC equipment certified by the Department of Energy and the Environmental Protection Agency (EPA).
HVAC appliances eligible with maximum credit amounts include:
- Furnaces and fans with gas or oil fuel ($150)
- Hot water boilers using gas or oil ($150)
- Non-solar water heaters ($300)
- Central air conditioning systems ($300)
- Air source heat pumps ($300)
Other eligibility requirements state that the HVAC system upgrades must be in your primary residence. Depending on the set price, you may receive 10% of the appliance’s cost up to $500 or between $50 and $300.
Limitations Regarding HVAC Tax Breaks for New HVAC Units
Several limitations make getting a tax break for new HVAC installation challenging. A $500 rebate is the entire amount a homeowner is eligible to apply for after making HVAC system upgrades throughout their whole life. Despite this, most HVAC appliances only garner a tax return of around $300.
Tax credits aren’t eligible when building a new home or upgrading rental properties; they only apply to primary residences. Furthermore, rebate prices aren’t always guaranteed. You’ll also need a certification from the manufacturer detailing the unit’s efficiency rating.
How to Claim Your HVAC Tax Breaks
Claiming your tax break for new HVAC system upgrades is relatively easy whether you file on paper or online. You’ll need to fill out Form 5695 and indicate how many installations you’ve had and the information about each newly installed unit. You’ll also need to fill out Form 1040A or Form 1040EZ.
First, you’ll need to ensure you meet the eligibility requirements with efficient HVAC equipment. After meeting eligibility requirements, you can install additional equipment. After consecutive installations, you may be eligible to receive a larger tax break amount.
When filing for an HVAC installation tax break, you can also include expenses for the appliance’s installation process. Instead of an itemized deduction, you’ll receive a standard deduction. Additional tax breaks may be available through local utility companies or state programs.
Future Tax Breaks for HVAC Equipment Installations
The Air Conditioning Contractors of America helped introduce the Home Energy Savings Act in 2021. This bill introduces larger tax credit breaks for HVAC equipment installations. With its passing, maximum lifetime amounts for tax breaks will increase to $1,200.
Stipulations for such tax deductions include contractor installations due to incorrect HVAC equipment installations. Homeowners lose up to 40% of their potential energy capabilities with improper installations. This requirement prevents energy inefficiencies.
New requirements for future home energy rebate programs are considerably more demanding on homeowners. Yet, they’ll be able to successfully reap the benefits of an HVAC installation. Simultaneously, they’ll maintain a consistent energy usage level and cut future energy costs.
Pennsylvania residents who need assistance with energy expenses also receive additional funding through the Low Income Home Energy Assistance Program (LIHEAP). These benefits may incentivize HVAC installations in low-income areas.
Other Benefits of HVAC System Upgrades
An Energy Star-rated HVAC system provides excellent health and financial benefits compared to high-power, low-efficiency models. A new air conditioning system or furnace installation means you don’t have to run your HVAC system for as long.
Besides deductions on your annual taxes, a tax break for new HVAC installations offers the following benefits:
- Increased energy efficiency
- Convenient operation with advanced controls
- Improved air quality
- Increased home value
- Smaller environmental footprint
- Lower energy bills
- Even heating and cooling
- Better respiratory health
Most household utility expenses come from your heating and cooling system operation. By getting energy-efficient models, you’ll see considerable differences in your energy usage.
Work with Topline Heating & Air for HVAC Tax Breaks on Installations and More
Curious about the potential tax break for new HVAC installations in Honey Brook, PA, or the surrounding areas? If you’re looking for reliable heater and furnace installers to help you get tax credits, look no further than Topline Heating & Air. We’ll perform a detailed HVAC installation and answer your questions regarding national and state tax rebate programs for energy efficiency upgrades.
Our team has years of experience installing air conditioners, furnaces, and other equipment. Choose Topline Heating & Air in Honey Brook and Lancaster, PA. Contact our friendly experts in Honey Brook today at (717) 628-6825.