To combat increasing energy expenses and embrace sustainability, many homeowners are trying new methods to maintain comfort levels while using less energy. 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 a big chunk of the installation costs, as long as the homeowners work with eligible equipment and submit the appropriate form.
If you’re trying to avoid a long process, maybe we can help! Air Concepts of Middle Georgia hopes this guide will give you what you need to secure 2024’s HVAC tax credits. Here’s what you’ll need to do.
Understanding the HVAC Tax Credits
These valuable tax credits for upgrading your home to be more energy-efficient are just one intended use of the recent Inflation Reduction Act. Energy costs affect everyone, so helping homeowners upgrade to higher efficiency utilities can benefit everyone. The primary goal of these credits is to mitigate costs associated with installation and renovation projects. Of particular importance are the Energy Efficiency Home Improvement Credit and the Residential Clean Energy Credit.
Don’t forget, to earn any of the credits, you’ll need to fill out IRS Form 5695. Additionally, this form has to be submitted within the same tax year the upgrades were installed, not bought.
Maximizing Savings with the Energy Efficiency Home Improvement Credit
Through 2032, the Energy Efficiency Home Improvement Credit provides up to $3,200 each year for installing higher efficiency home upgrades. This equals 30% of the total project’s cost. Keep in mind that in order to get back the maximum amount, it involves making different investments. For example, you’ll save up to $2,000 for installing a higher efficiency heat pump. This can be combined with the remaining $1,200 in credits for other eligible upgrades made within the tax year.
While new heat pump systems are a key target for this incentive, other HVAC upgrades like efficient furnaces and air conditioners also qualify. You’ll need to confirm the make and model’s energy efficiency rating is sufficient to qualify.
Residential Clean Energy Credit
The Residential Clean Energy Credit offers 30% savings on a wide range of 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 targets renewable energy sources like solar and wind energy.
Some key details of this tax credit include requiring the installation project to be finished 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 make things a little easier when investing in renewables.
Additional Qualifications for Energy Tax Credits
Because HVAC systems are one of the major reasons for high energy bills, these tax credits offer more access to the most energy-efficient options. But home energy efficiency can be improved in lots of other ways. Apart from the previously listed HVAC upgrades, {you could also choose|other eligible items include|you also have access to:
- Heat pump water heaters
- Electrical panel upgrades
- Upgraded electrical wiring
- Insulation, air sealing and ventilation enhancements
- Energy-efficient cooking appliances like stoves, cooktops, and ovens
- Heat pump clothes dryers
- High-efficiency water boilers
Like the HVAC systems, you’ll need to confirm that your chosen products meet the required energy efficiency ratings.
Three Tips for Making the Most of 2024 HVAC Tax Credits
While any one of those upgrades can enhance your home's energy performance, some planning ahead will ensure the best chance at more long-term benefits. Get the most from your HVAC tax credits with these three tips:
- Conduct a home energy audit to identify impactful upgrades. Rely on professional HVAC assessments for crucial advice.
- Install new high efficiency windows and doors.
- Explore potential rebates from utility companies for clean energy upgrades. Renewable sources like solar, wind, and geothermal contribute to community power grid sustainability.
- Don’t forget financing options from local service companies, which can help reduce costs even more.
Air Concepts of Middle Georgia Can Help You Secure HVAC Credits for 2024
Partner with local HVAC professionals like Air Concepts of Middle Georgia for help with home energy audits and new installation projects. Our seasoned installers can deliver whatever you need for home energy efficiency upgrades.