Tax Credits for Replacing Heating and Cooling Systems

Welcome!

Brought to you by the National Association of Realtors^®

Find HouseLogic on:: Facebook; |; Twitter
About the Site Hide This

You care about your home. The NATIONAL ASSOCIATION OF REALTORS® cares about homeownership. To help you become the best, most responsible homeowner you aspire to be, we want to provide you with free information and tools you can use to make smart and timely decisions about your home.

From time to time, we may reach out to you to help us support legislation and/or policies that may have an impact on you, the homeowner. You can choose to join our cause. Or you can choose not to. Regardless, your privacy is safe with us.

We'll never share or sell your email address or other personal information you may provide us in the course of using the site with anyone without your explicit consent.

Published: January 09, 2013
By: Suzanne Cosgrove
Be the first to comment
4 People Did It

If you installed an energy-tax-credit-eligible heating and cooling system in 2012, or will in 2013, here’s what you need to do to collect.

Effort: Low 1 day (research)
Saves: Med $200/yr (energy bills)
Investment: Med $3,500 (HE furnace)

Through 2013, the Feds allow a suite of energy tax credits for heating and cooling systems and related energy-efficiency improvements.

The basics:

Lifetime credit max of 10% of costs, up to $500 for all energy improvements combined.

If you got $500 or more back during 2009-2010, you’re done.

File IRS Form 5695 with your returns. This can be tricky, so pay attention to the details.

Although there is a $500 overall ceiling, some improvements have individual limits below $500:

$50 for any advanced main air-circulating fan.

$150 for any qualified natural gas, propane, or oil furnace or hot water boiler.

$300 for any qualified item of energy-efficient building property, as specified by the IRS. In previous guidance, this category included certain approved electric and geothermal heat pumps, central air conditioning systems, and natural gas, propane, or oil water heaters.

Installation costs are generally covered.

Limits and deadlines:

You can’t claim more than a $500 credit for the year.

Save manufacture certifications and receipts in case you need them for filing.

You must have installed a relevant heating and cooling system by Dec. 31, 2013.

The Energy Star site has posted new guidelines on what heating and cooling systems are covered. It’s your safest bet for information on which kinds of systems and individual products get you the credit.

Don’t rely solely on contractors who may not know the details of the energy tax credit program or who promise their products will get the credit in order to make a sale.

Read on to learn more:

What efficiency means to your wallet
Not all heating and cooling systems qualify for tax credit
Payback and benefits of HVAC replacement
5 must-know details before you replace HVAC

Next: What efficiency means to your wallet

Suzanne Cosgrove

, who spent nine years as an editor at the Chicago Tribune, has written for a number of business and real estate publications. She has a 90-year-old house and a long list of home-improvement projects.

1 2 3 4 5 Next

Track Your Progress

Print Checklist

Keep your house energy-efficient by checking for air leaks:

They’re lush, green, and all-American. They’re also water-hogging, time-sucking nuisances. In fact, some are saying ‘no’ to turf. Should we get rid of our lawns?

What are lawn alternatives?

Turf grasses

Ground cover

Fake grass

And, yes, lawn paint!