Whether you recently purchased a new HVAC system in O’Fallon, MO or are getting ready to, you may qualify for a tax deduction. For instance, if you bought a new HVAC system from Swiss Air Heating & Cooling, LLC, you may be able to deduct the installation costs. Keep your HVAC paperwork together, including your receipts, so you can take advantage of any benefits for which you are eligible. Here’s what else you need to know.
Energy Efficient Home Improvement Tax Credit
By using the Energy Efficient Home Improvement Credit, you can receive up to $3,200 for qualified improvements and other HVAC services. The deadline for applying for this credit is 2032, and the credit is good for up to 30% of the costs involved with:
- Qualified HVAC improvements
- Home energy audits
- Residential energy property
There is no lifetime limit, so you can receive up to $3,200 per year between now and 2032. Annual limits include:
- $1,200 – Home improvements and property costs, including up to $150 for an energy audit.
- $2,000 – Per qualified water heaters, heat pumps, etc.
Home Energy Audit Credit
Having a professional HVAC company perform a home energy audit may qualify you for a $150 deduction. The purpose of these audits is to check your home and provide you with a written list that points out the most cost-effective improvements you can make. These improvements can range from purchasing a new HVAC system to putting more insulation in your walls.
Residential Energy Property: Air Conditioning
You can get up to a $600 deduction if you meet or exceed the highest efficiency tier listed by the Consortium for Energy Efficiency (CEE). This applies to central air conditioners and includes the cost of installation.
Energy Property: Heat Pumps
Before buying a new heat pump, make sure that it meets, or exceeds, the Consortium for Energy Efficiency’s highest efficiency tier. The date that the CEE is checked will be January 1 the year your heat pump was installed. If your heat pump qualifies on January 1 but no longer qualifies on July 1, you’ll still be eligible for this tax deduction.
Proving Eligibility
You will need to provide the manufacturer’s certification showing your new unit’s Seasonal Energy Efficiency Ratio (SEER). As of 2023, the U.S. government updated its ranking to SEER2. O’Fallon is located in the North Region, which means your units must have a minimum SEER2 of:
- Split System Air Conditioners: 13.4 or higher
- Split System Heat Pumps: 14.3 or higher
- Single Packaged Units: 13.4 or higher
Special Limitations
The Energy Efficient Home Improvement Tax Credit is only offered on existing houses. In other words, you won’t receive this credit if you’ve purchased a new home. Furthermore, you can only take advantage of this credit for your primary residence. Landlords may not use the Energy Efficient Home Improvement Tax Credit for any of their rental properties.
Applying for a Federal Tax Credit
Keep your receipt and the HVAC manufacturer’s certification. During tax time, download a copy of Form 5695 from the IRS website. Fill out each relevant section, then send it to the IRS along with your other tax paperwork.
High-Efficiency Electric Home Rebate Program
Additionally, you may qualify for the High-Efficiency Electric Home Rebate Program. This allows you to gain up to an extra $14,000 for making HVAC improvements. These include:
- Up to $8,000 – Energy-Star qualified heat pumps
- Up to $4,000 – Electrical panel upgrades
- Up to $2,500 – Electrical wiring improvements
- Up to $1,600 – Home insulation and sealing
The High-Efficiency Electric Home Rebate Program is based on your household’s income, which is based on the O’Fallon area’s median income.
- Below 80% percent of median income: 100% eligible
- Between 80% and 150%: 50% eligible
- Above 150%: Not eligible
The best part about this program is that it will pay up to 100% of the cost upfront, so there is no need to wait until tax time.
Purchase a New HVAC System in O’Fallon
Swiss Air Heating & Cooling, LLC has served the O’Fallon area since 1989. We offer a full line of HVAC-related services, including heating installation and repairs, heat pumps and central AC. We’re proud to have an A+ rating from the Better Business Bureau. We care about your peace of mind, your home and your bottom line and your home’s indoor air quality.
Are you in the market for a new HVAC system? Turn to Swiss Air Heating & Cooling, LLC in the O’Fallon area! We’ll help you take advantage of any applicable tax credits.
