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Federal Tax Credits
The federal government offers incentive programs for homeowners just like you to upgrade their heating and cooling systems to high-efficiency models. When you qualify for this program, certain reductions to your annual income tax payments can be made based on the type of high-efficiency unit you choose and the total cost of buying and installing the equipment.
WHAT INCENTIVES ARE AVAILABLE?
The US Department of Energy has identified many types of HVAC systems that qualify for tax credits. When considering a new high-efficiency furnace, air conditioner or heat pump, look for the ENERGY STAR logo which indicates that the model has been tested for efficiency and qualifies for a credit.
Installations completed during 2015 and by December 31, 2016 can qualify for Federal tax credits. Geothermal heat pumps are among renewable energy systems that qualify for a 30% tax credit (expiring December 31, 2016) with no upper limit. To qualify, improvements must be done on an existing home; new construction does not qualify. The home must also be the taxpayer's primary residence to qualify for tax credits.
HOW MUCH OF A TAX CREDIT?
Be sure to check the Energy.gov website for up-to-date information and details. Recently, tax credits were listed as 10% of total cost up to $500, or specific amounts ranging from $50 to $300, depending on the product. HVAC equipment that qualifies for tax credits might include high-efficiency furnaces, air conditioners, air-to-air heat pumps, insulation and water heaters. Combined with other incentives, these credits make upgrading home comfort and saving energy dollars sooner rather than waiting a very appealing option for more Wisconsin homeowners.
HOW TO APPLY
When you have your qualifying high-efficiency HVAC system installed, be sure to keep your invoices, receipts and the Manufacturer Certification Statement for each unit you are claiming. Use Federal Tax Form 5695 when you file your Federal Tax return. If you have any questions about which HVAC equipment models carry the ENERGY STAR rating, be sure to reach out to our CTC customer satisfaction team; we're happy to discuss and walk you through the process of selecting a tax credit qualified replacement unit.