Federal Tax Credits

Maximize Savings: Federal Tax Credits for HVAC Systems

Federal Tax Credits Air Conditioning & Heating

Federal tax credits for a new heat pump installation are incentives provided by the government to encourage the use of energy-efficient heating and cooling systems. These credits allow taxpayers to subtract the credit amount directly from the taxes they owe to the government.

For example, if you install a qualifying heat pump system and are eligible for a $500 tax credit, you can reduce the amount of federal income tax you owe by $500. It is important to note that tax credits are more valuable than tax deductions because they directly reduce the amount of tax owed, rather than just reducing the amount of taxable income.

To claim the credit, you typically need to file IRS Form 5695 along with your tax return. It is also important to check the specific requirements and eligibility criteria for the credit, as they can vary based on the type of heat pump and the year in which it was installed.

Currently, there are programs available that could cover 30% up to $2000 per year if you install an efficient heat pump between now and 2032. This tax credit has a cap of $2,000 per year.

To qualify for these credits, before you purchase a new heat pump or water heater, it is best to consult with your trusted HVAC service and HVAC installation provider at Pipco Air Conditioning and Heating serving the Timonium, MD and surrounding areas for over 60 years.

Helpful Resources:

https://www.irs.gov/credits-deductions/energy-efficient-home-improvement-credit

https://environmentamerica.org/center/resources/heat-pumps-how-federal-tax-credits-can-help-you-get-one