How to Get Tax Credits When You Upgrade Your Home’s Air Conditioner

16 Aug How to Get Tax Credits When You Upgrade Your Home’s Air Conditioner

Making qualified energy-efficient upgrades to your home can qualify you for tax credits and rebates from city and federal government agencies. If you have an air conditioner that is over 15 years old, now is the perfect time to invest in a new air conditioning installation from an HVAC contractor in Tucson, AZ who specializes in energy-efficient heating and cooling systems. Here is a guide to determining which tax credits you’re eligible for and how to claim them.

Which AC and HVAC Upgrades Qualify for AZ Tax Credits?

Only certain air conditioning and HVAC upgrades qualify for Arizona and federal tax credits. Any upgrades you have made or will make from January 1, 2023 onward can be claimed until January 1, 2033:

• Installation of a high-efficiency electric or natural gas heat pump 
• Installation of a central air conditioner 
• Installation of an energy-efficient natural gas, propane, or oil water heater
• Installation of an energy-efficient natural gas, propane, or oil furnace
• Installation of an energy-efficient hot water boiler
• Completing duct and attic sealing
• Adding or replacing attic insulation
• Complete a home energy audit that includes a written report and inspection

Who Qualifies for Federal Tax Credits? 

You can claim the federal energy efficient home improvement credit for any qualifying improvements made to your main home. Your main home is the home you live in for the majority of the time. Your home must be:

• Your primary residence
• Located in the United States
• An existing home, not a new home or new build

You cannot claim the tax credit on a home that you own that you rent out to someone else, use as a business or office, or use as a vacation home or Airbnb.

Understanding Subsidies, Rebates, and Incentives

If your home improvement project qualified for subsidies, rebates, and incentives that you have already claimed, you may need to subtract them from your qualified property expenses. You should subtract public utility subsidies for installing clean energy as well rebates from qualified expenses if they meet all of these criteria:

• The rebate was calculated based on the cost of your property, and
• The rebate comes from someone connected to the sale like the manufacturer, installer, distributor, or seller, and 
• The rebate was not given as payment for services that you provided.

Claiming Your Tax Credit

You can claim your tax credit in the tax year in which the improvement was made or the equipment was installed, not when it was purchased. You will file Form 5695, Residential Energy Credits Part II with your tax return. You will need to provide receipts and installation documentation along with your form.

Schedule an AC Tune Up or Upgrade Today

Our HVAC contractors at Temco Air Environmental can help you take advantage of tax credits with an energy-efficient air conditioning installation in Tucson, AZ. We specialize in reliable, affordable heating and cooling services, including new and replacement air conditioning systems, air conditioning repair and maintenance, and furnace, heat pump, and air filtration system services. Call us now at (520) 622-2909 or contact us online to get started.