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. As part of the Inflation Reduction Act, federal tax credits are available for upgrading to more efficient HVAC systems, such as air conditioners. These credits offer big savings, as long as the homeowners work with qualifying equipment and submit the right paperwork.

If you’re trying to avoid a long process, we’re offering to help! Desert Husky HVAC/R Services hopes this guide will give you what you need to secure 2024’s HVAC tax credits. Here’s how to make it happen.

Understanding the HVAC Tax Credits

These valuable tax credits for upgrading your home to be more energy-efficient are just one goal of the recent Inflation Reduction Act. Energy costs affect everyone, so helping homeowners upgrade to higher efficiency utilities can benefit everyone. The key provision of these credits is to reduce the cost of installing high efficiency upgrades. Two of note are the Residential Clean Energy Credit and the Energy Efficiency Home Improvement Credit.

Don’t forget, to apply for the credits, you’ll have to fill out IRS Form 5695. Additionally, this form is submitted during the same tax year any upgrades were installed, not purchased.

Maximizing Savings with the Energy Efficiency Home Improvement Credit

Through 2032, the Energy Efficiency Home Improvement Credit provides up to $3,200 annually for installing higher efficiency home upgrades. This amounts to 30% of the total project’s cost. Keep in mind that in order to be eligible for the maximum amount, it means making severel investments. For example, you’ll save 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 new heat pump systems are a great use of the program, other HVAC upgrades like efficient furnaces and air conditioners also qualify. You’ll need to confirm that your choice’s energy efficiency rating is high enough for eligibility.

Exploring the Residential Clean Energy Credit

The Residential Clean Energy Credit provides 30% savings on a variety of residential clean energy efficiency projects. 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 provisions of the tax credit include requiring the installation project to be finished between 2022 and 2032. But at the same time, homeowners can keep the excess credit to reduce future taxes. This is a great way to soften the entry into investing in clean energy.

What Else Is Eligible for These Tax Credits?

Because HVAC systems are one of the biggest expenses on your energy bill, these tax credits can guide you to 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:

  • Heat pump water heaters
  • Modern electrical panel improvements
  • New electrical wiring
  • Insulation, air sealing and ventilation enhancements
  • High-efficiency electric stoves, cooktops, ranges or ovens
  • Efficient heat pump clothes drying solutions
  • Water boilers

Just like with installing one or more HVAC systems, you’ll need to verify that your chosen products meet the eligible energy efficiency ratings.

Maximizing Your 2024 HVAC Tax Credits: Top 3 Tips

While any one of those upgrades can boost home energy efficiency, a little planning will ensure the best chance at more long-term benefits. Maximize your HVAC tax credits with these three tips:

  1. Conduct a home energy audit to identify impactful upgrades. Trust experienced HVAC companies to pinpoint essential products and services.
  2. Improve your home's thermal efficiency with better windows and doors.
  3. Look into rebates for clean energy projects from utilities. Renewable sources like solar, wind, and geothermal contribute to community power grid sustainability.
  4. Remember to consider financing plans offered by service providers.

Secure Your 2024 HVAC Credits with Help from Desert Husky HVAC/R Services

Partner with local HVAC professionals like Desert Husky HVAC/R Services for eligible serves like energy assessments or new installation. Our helpful installers will deliver everything you need for a more energy-efficient home.