If your aging HVAC system was running on borrowed time over this hot, long summer, you may want to consider replacement sooner than later. One of the many reasons to consider purchasing a new HVAC system is taxes. Yes, taxes.
In January 2020, the US Congress renewed the Non-business Energy Property Tax Credit, also referred to as Section 25C of the tax code. This credit enables you to obtain up to $500 in tax credits when you purchase and install an Energy Star certified, energy efficient HVAC System component. This includes air conditioners, heat pumps, furnaces and more.
Taking advantage of this tax savings is simple. You’ll need to fill out IRS Form 5695 as part of your 2020 tax filing. There are several tiers of energy efficiency that determine the amount of the tax credit you will receive. These tiers are calculated by the Consortium for Energy Efficiency. For example, an energy efficient air conditioner will obtain a $300 credit. Add more items, and the savings is greater. This credit is available for primary residences only. It is not for HVAC installations in vacation homes or investment properties.
With the political landscape continuously changing, no one knows how long this tax credit will remain available. So, it’s smart to take advantage of it while it’s here. And, you’ll also gain a host of other benefits once you do decide to upgrade to a more efficient HVAC system. These include measurably lower operational costs, greater efficiency, improved temperature control, and increased home value. You’ll also get the wonderful added benefit of knowing that you won’t be dealing with an HVAC system breakdown next summer.
Do You Have a Home Business?
If you run a business from your home, your HVAC purchase may qualify you for even more tax savings. The costs associated to the purchase and installation of a new air conditioner can be partially deductible – if you can show that it is an ordinary and necessary expense to operate your business. Consult with your tax professional for more details.
Call Bruce’s today for a free estimate on a new HVAC system.
