Homeowners who want or need to upgrade their heating and cooling systems in 2021 are in luck. The federal government is offering an HVAC tax credit for equipment that qualifies for various energy high-efficiency programs.
When Congress renewed the 25C tax credit program for high-efficiency HVAC systems in late 2020, they made it possible for homeowners who upgraded to Energy Star-certified systems to reduce their costs by offering this federal tax credit.
In order to be certified as Energy Star, the appliance is tested and compared to similar products. It must demonstrate under various conditions that it uses less energy on a consistent basis.
The HVAC equipment includes:
- Gas and oil furnaces or boilers
- Heat pumps
- Geothermal heat pumps (GHPs)
- Central air conditioners
- Mini-split heat pumps or air conditioners
With the exception of the geothermal heat pumps, the maximum HVAC tax credit for a qualifying heat pump or central air conditioner stands at $300, while it’s $150 for gas (including propane) or oil furnaces and boilers.
GHPs qualify for a 26% rebate, with no upward limit on their purchase and installation costs. The credit for a GHP is so generous because they are the most energy efficient, albeit the most expensive, of all HVAC systems. The government allows owners of residential rental properties or second homes to upgrade to a GHP and claim the full tax credit.
The equipment must be installed in your existing primary home. With the exception of GHPs, new homes and rental properties do not qualify for this particular HVAC tax credit program.
These tax credits will help you offset the cost of upgrading your HVAC system to one that is more energy efficient, which benefits both you and the planet. Your energy consumption will likely fall without having to reduce your family’s comfort level.
These HVAC tax credits expire on Dec. 31, 2021. If you’d like to learn more about using them to offset the overall cost of upgrading your HVAC equipment, contact Detmer and Sons. We provide trusted HVAC services for Dayton-area homeowners.