The “fiscal cliff” negotiations that dominated the news around New Year’s Day 2013 did not appear to have much benefit for the individual homeowner. However, the 25C tax credits in the fiscal cliff deal did restore some expired energy credits and establish a series of incentives for installing new or upgraded high-efficiency home heating and cooling systems.
The credits amount to a total of $500 for certain types of equipment. The credits are retroactive for 2012 and are applicable throughout 2013. The 25C credits cannot be applied if you have already taken energy tax credits since Jan. 1, 2005.
Each type of HVAC system has a maximum allowable amount that can be applied to the $500 overall limit on tax credits:
$150 limit:
Natural gas, propane or oil furnace or hot-water boiler with Annual Fuel Utilization Efficiency (AFUE) rating of 95 percent or higher.
$300 limit:
- High-efficiency electric heat pump with a minimum 15 Seasonal Energy Efficiency Ratio (SEER), 12.5 Energy Efficiency Rating (EER), and 8.5 Heating Seasonal Performance Factor (HSPF) for air source heat pumps, and 14 SEER, 12 EER, and 8 HSPF for packaged heat pump systems.
- High-efficiency central air conditioner with a minimum 16 SEER and 13 EER for split-systems or 14 SEER and 12 EER for package systems.
- Water heaters that use propane, natural gas or oil for fuel, and have an energy factor (EF) of 0.82 or higher or a thermal efficiency of at least 90 percent.
- Electric heat pump water heater with an EF of 2.0 or higher.
Individuals can claim the tax credits by filling out Form 5695, Residential Energy Credits, and including it with their income tax return. The amount of the tax credit will be deducted from the amount of tax owed or added to the refund that’s due. Contact your tax preparation professional for more specific advice on claiming these credits.
Ace Hardware Home Services, Inc. has been a premier source of HVAC sales, service and maintenance in Dayton and the surrounding area for more than 30 years. Contact us today for more information on the 25C energy tax credits and how you can take advantage of them to improve your home’s energy efficiency.
Our goal is to help educate our customers in Dayton, Ohio about energy and home comfort issues (specific to HVAC systems). For more information about energy tax credits and other HVAC topics, download our free Home Comfort Resource guide.
Image courtesy of Shutterstock
