If you need or want to upgrade your home’s heating and cooling equipment, this could be the year to do it. The federal government has extended HVAC tax credits until the end of 2021. These credits include everything from blower fans to central geothermal heat pumps (GHPs).
The equipment has to meet the U.S. Department of Energy’s Energy Star program specifications and must be installed before Dec. 31, 2021, in your existing primary home, to get the HVAC tax credit. Rentals do not qualify, nor do second homes, although geothermal systems can be installed in either. The HVAC tax credits also extend to GHPs through 2023.
These credits defray some of the costs associated with new Energy Star equipment. The equipment they cover include:
- Advanced main-air circulating fan
- Air-source heat pumps
- Central air conditioners
- Gas and oil furnaces and boilers
- Geothermal heat pumps
The maximum HVAC tax credit of $300 is for a high-efficiency heat pump or a central air conditioner. The qualifying efficiency rating, called the seasonal energy efficiency ratio (SEER), starts at 14 for both of these cooling systems. Furnaces with an AFUE (annual fuel utilization efficiency) rating of 95 and higher qualify for a $150 HVA tax credit.
The advanced, main-air circulating fan is one that pushes the air that the furnace heats through your ducts with more power than the typical fan. As a consequence, you’ll benefit from faster heating of your home. The maximum tax credit for this fan is $50.
A geothermal heat pump will provide the greatest cost savings over time, since it uses far less energy than other kinds of central heating and cooling systems and it is highly durable. Its HVAC tax credit is 26% of the total purchase price and installation. While the energy and financial savings with a GHP are substantial, its installation costs exceed those of other kinds of HVAC systems.If you’d like to learn more about taking advantage of an HVAC tax credit, contact the pros at Mowery Heating, Cooling, and Plumbing. We provide HVAC and plumbing services for Indianapolis-area homeowners.