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Homeowner HVAC Tax Incentives

Published on: May 2, 2012

In an effort to encourage more Americans to consider alternative energy sources, the federal government passed a series of tax rebates that were in effect between 2006 and 2011. Now that we are in 2012, a number of these programs have expired. However, if you have not yet filed your 2011 tax returns, you may be eligible to claim one or more credits for last year. A local air conditioning and heating company can provide you with detailed instructions on how to do this, as can the Internal Revenue Service.

There are still some remaining tax credits for 2012 for people who install solar water heaters, solar panels, wind energy systems and geothermal heat pumps. These air conditioning and heating credits are generally not as popular with homeowners because they require extensive upfront work to be done first. Nonetheless, the tax credits can provide substantial savings to homeowners who are willing to make the initial investment in alternative forms of energy. Taxpayers may claim these credits from now until tax year 2016.

Homeowners who upgrade to air an air conditioning and heating system that makes use of one of the energy sources mentioned are eligible to claim up to 30 percent of the cost on their tax return in 2013. There is no upper limit on the amount of the credit, but it can only be used on primary places of residence. Homes that are being built in 2012, vacation homes and rental property are not eligible to take the air conditioning and heating alternative energy credit.

In addition to the 30 percent tax credit for upgrading to a geothermal heat pump, wind energy system or other form of alternative energy, the federal government is also offering a $500 one-time credit for every kilowatt the taxpayer saves.