Energy Efficient Home & HVAC Tax Credits

Energy Efficient Home & HVAC Tax Credits - Tulsa Oklahoma

Installing energy-efficient HVAC equipment is a great way to reduce your carbon footprint while saving money and energy. However, this equipment is also often expensive. You can save money, but only if you can afford the system in the first place. Fortunately, there are a number of tax incentives that can help offset those costs. Here's a breakdown of different HVAC tax credits and what they entail.

Federal Energy Tax Credits - 2023

The previous Nonbusiness Energy Property credit (25C) for installing high-efficiency equipment was extended through 2022 and provides federal tax credits of up to $500.
The amended Energy Efficient Home Improvement Credit (25C) begins in 2023 and extends through 2032. It increases the tax credit limits for high-efficiency equipment as follows:

1. Eligible equipment includes:

   • Heat pumps and heat pump water heaters

   • Energy-efficient HVAC systems (including furnaces, boilers, and central AC)

2. The 25C credit has an annual cap of $1,200 (except heat pump):

   • Up to $600 each for a qualified air conditioner or gas furnace, with an annual cap of $1,200

   • Up to $2,000 with a qualified heat pump, heat pump water heater, or boiler

There are no income requirements for this tax credit, and it cannot be combined with other federal programs.

Federal HVAC Tax Credit

The federal government has always made a point of encouraging energy efficiency for homeowners as well as business owners. Switching to high-efficiency HVAC equipment helps reduce pollution and fight global warming.

The most recent HVAC tax credit is called 25C. It covers high-efficiency heating and cooling systems, including A/Cs, furnaces, heat pumps, and mini splits. Originally enacted for equipment purchased in 2018 and 2019, the credit has been extended through 2021.

Therefore, if you're thinking about getting a high-efficiency system, now is the time. Any qualifying system purchased and installed before the end of this year can earn you a credit of 10% of the cost up to $500. There's also a $300 maximum credit available for certain ACs, heat pumps, and mini-splits, or a $150 credit for furnaces and boilers.

Renewable Energy Credits

There are also credits for homeowners who invest in renewable energy, including fuel cells, wind turbines, and geothermal heat pumps. If you installed a qualifying renewable energy system by the end of 2019, you can claim up to 30% of the cost. If you install one by the end of 2022, you can claim up to 26%, or 22% by the end of 2023.

There may also be certain state credits you can claim that are specific to Oklahoma. Whatever tax credits you qualify for, be sure you're taking full advantage of them. Talk to your tax adviser to see how you can benefit from these credits and what you need to do to claim them.

For help making upgrades that you can claim an HVAC tax credit for, contact us at Air Assurance. We help Broken Arrow homes save money and energy.

AC Estimates Tulsa, OK | Repair vs. Replace

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AC Estimates Tulsa, OK | Repair vs. Replace

A time will come when you'll have to choose between repairing and replacing your HVAC unit. Considering the importance and considerable cost of an HVAC system, you'll want to ensure you make the best decision for your house and for your family. So when should you repair or replace? Let's explore the crucial factors you should consider when it comes to repair or replace.

Age

HVAC systems generally last 10 to 15 years. If your furnace has lasted more than 15 years or your air conditioner is more than 10 years old, you should consider replacing them. An aging HVAC system will exhibit certain warning signs. The system may make unusual noises when starting up, your home may be damp or stuffy, or you may have to adjust the thermostat constantly to stay comfortable.

Need for Repairs

If you haven't incurred significant maintenance or repair costs since installing your HVAC unit, it may be better to repair it. However, consider replacing it if it keeps needing repairs. An excellent formula you can use is multiplying the system's age by the repair costs. If the result is more than $5,000, it's better to replace the unit.

How Long You'll Stay in Your House

If you're not planning to stay in your current house for long, the better option may be to repair your unit. A new unit's installation costs will most likely be higher than what you'd get back from the resulting increase in your home's sale price. However, it's best to replace your unit if it's very old, as that could hurt your home's sale price.

Your Current Unit's Efficiency

The older your current system is, the more inefficient it's likely to be when compared to modern units. Today's units have high efficiency ratings in addition to advanced features, such as variable-speed technology, that drastically increase your energy savings. Upgrading your older system allows you to take advantage of home-comfort advancements that deliver improved efficiency and maximize energy savings.

Still don't know whether to repair or replace? An HVAC technician can help you figure out an HVAC unit's lifetime cost analysis and return on investment to help you make a more informed decision. For all your HVAC repair or replace needs in the Broken Arrow area, contact the certified technicians at Air Assurance.