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. With help from the Inflation Reduction Act, federal tax credits are available for energy-efficient home upgrades, especially HVAC systems like air conditioners. These credits offer significant savings, provided that homeowners choose qualifying equipment and submit the right paperwork.

If you’re worried about a long, complicated process, we can share something that will help! Stieferman Heating Company Inc hopes this guide will give you what you need to secure 2024’s HVAC tax credits. Here’s what you should know.

Understanding the HVAC Tax Credits

These valuable tax credits for boosting your home’s energy efficiency are just one goal of the recent Inflation Reduction Act. With the higher cost of energy making an impact, helping more homeowners upgrade their equipment is always beneficial. The key provision of these credits is to mitigate costs associated with installation and renovation projects. The two we’ll cover are the Residential Clean Energy Credit and the Energy Efficiency Home Improvement Credit.

But remember, to claim your credits, you’ll have to complete IRS Form 5695. Additionally, this form needs to be submitted for the same tax year the upgrades were installed, not bought.

Energy Efficiency Home Improvement Credit

Through 2032, the Energy Efficiency Home Improvement Credit provides up to $3,200 annually for energy-efficient home upgrades. This can be up to 30% of the total project’s cost. It's important to note in order to get back the maximum amount, it means making severel investments. For example, you’ll receive up to $2,000 for installing a higher efficiency heat pump. This can be paired with an additional $1,200 in credits for more projects in the tax year.

While heat pumps are a great use of the program, high-efficiency furnaces, air conditioners, boilers, and other HVAC systems are still eligible for this tax credit. You should confirm that your choice’s energy efficiency rating is sufficient to qualify.

Residential Clean Energy Credit

The Residential Clean Energy Credit offers 30% savings on a number of other residential clean energy equipment upgrades. Eligibility is only extended to homeowners seeking to update existing or newly constructed homes. While the Home Improvement Credit works primarily with utilities and HVAC systems, this credit is instead designed around renewable energy sources like solar and wind energy.

Some specific items in this tax credit include the requirement that installation must occur between 2022 and 2032. But at the same time, homeowners can carry forward excess credit to offset future tax obligations. This is a great way to spread out costs and keep them more manageable.

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:

  • Energy-saving heat pump water heating systems
  • Modern electrical panel improvements
  • New electrical wiring
  • Enhancements to insulation, air sealing, and ventilation
  • High-efficiency electric stoves, cooktops, ranges or ovens
  • Heat pump clothes dryers
  • High-efficiency water boilers

Like the HVAC systems, you’ll need to confirm that your preferred make and model features the required energy efficiency ratings.

Three Tips for Making the Most of 2024 HVAC Tax Credits

While all the listed upgrades can boost home energy efficiency, some planning ahead will ensure more long-term benefits. Get the most from your HVAC tax credits with these reminders:

  1. Perform an energy audit to pinpoint valuable enhancements. Trust experienced HVAC companies to pinpoint essential products and services.
  2. Install new high efficiency windows and doors.
  3. Explore potential rebates from utility companies for clean energy upgrades. Renewable sources like solar, wind, and geothermal contribute to community power grid sustainability.
  4. Don’t forget financing options from local service companies, which can help reduce costs even more.

Stieferman Heating Company Inc Can Help You Secure HVAC Credits for 2024

Partner with local HVAC professionals like Stieferman Heating Company Inc for help with home energy audits and new installation projects. Our helpful installers know how to provide all you need for a more energy-efficient home.