Federal Tax Credits

Fiscal Cliff Legislation Retroactively Extends HVAC and Water Heating Tax Credits

Fiscal cliff avoidance legislation, signed into law by President Obama on January 2, also retroactively reinstated 25C tax credits for highly efficient HVAC and water heating equipment.

The bill – among many other tax provisions – extends the HVAC/water heater tax credits that expired in 2011 from Jan. 1, 1012, until Dec. 31, 2013. The tax credits cover qualified equipment included in Section 25C of the Internal Revenue Code.

Qualified equipment includes:

Water heaters ($300 tax credit)

  • Electric heat pump water heaters with an energy factor of at least 2.0
  • Natural gas, propane, or oil water heaters with an energy factor of at least 0.82 or a thermal efficiency of at least 90%

Furnaces ($150 tax credit)

  • Natural gas, propane, or oil furnaces with an AFUE of at least 95

Boilers ($150 tax credit)

  • Natural gas, propane, or oil boilers with an AFUE of at least 95

Air-conditioners and heat pumps ($300 tax credit)

  • Split system central air-conditioners with the highest efficiency CEE tier as of Jan. 1, 2009 (16 SEER; 13 EER)
  • Packaged central air-conditioners with the highest efficiency CEE tier as of Jan. 1, 2009 (14 SEER; 12 EER)
  • Split system electric heat pumps with the highest efficiency CEE tier as of Jan. 1, 2009 (8.5 HSPF; 12.5 EER; 15 SEER)
  • Packaged electric heat pumps with the highest efficiency CEE tier as of Jan. 1, 2009 (8.0 HSPF; 12.0 EER; 14 SEER)

Advanced main air circulating fan ($50 tax credit)

  • A fan used in a natural gas, propane, or oil furnace with an annual electricity use of no more than 2% of the total energy use of the furnace

Solar Tax Credit

solar_tax_credit

Get a tax break for going solar

Government tax credits for solar

Federal HVAC Credit (25C) offers a tax credit of up to $300 for the solar-ready heat pump or air conditioner that’s at the heart of the SunSource system.

The federal solar credit (25D) equals 30% of the cost—with no upper limit—of the SunSource solar modules, including installation costs. It also covers 9% of the total cost of the solar-ready products. By installing a solar-ready outdoor unit (air conditioner or heat pump) and attaching at least one solar module, the solar-ready outdoor unit will qualify for both the solar and HVAC tax credits.

Consult a qualified tax professional for complete details. All federal solar tax credits are available through 2016. You can also learn more in the “Tax Credits for Energy Efficiency” section at www.energystar.gov.

Additional solar tax credits and incentives

The SunSource Home Energy System may also qualify for tax credits from your state and local governments. In many areas, local utility companies are also offering rebates and other incentives.

To learn about rebates and credits available in your area, check with your local utility company or visit dsireusa.org.