$300 Federal Tax Credits for Air Conditioners and Heat Pumps [2022]
***Update as of January 12, 2023: Read our post about the federal tax credits for air conditioners and heat pumps under the Inflation Reduction Act.
Did you upgrade your air conditioner in 2021 or 2022? Keep reading this post for information about the Non-Business Energy Property Tax Credits, which were extended and apply retroactively through 12/31/2022.
In addition to bringing you benefits like lower electric bills, your new AC could save you some cash this tax season.
In 2022, the government extended the Non-Business Energy Property Tax Credits on residential air conditioning equipment. This means that certain qualifying air conditioners and heat pumps installed through December 31, 2022 are eligible for a $300 tax credit.
The tax credit also retroactively applies to new air conditioners installed in the 2018-2021 tax year. (The tax credit originally expired December 31, 2017.) If you have not previously claimed the Non-Business Energy Property Tax Credit, consult with your tax professional for details.
$300 Federal Tax Credits for Air Conditioners and Heat Pumps
Does My New AC System Qualify?
Air Conditioners Meeting the Following Requirements are Eligible for a $300 Tax Credit:
- Split Systems must have a SEER (Seasonal Energy Efficiency Ratio) of greater than or equal to 16, and an EER (Energy Efficiency Ratio) of greater than or equal to 13.
- Packaged Systems must have a SEER (Seasonal Energy Efficiency Ratio) of greater than or equal to 14, and an EER (Energy Efficiency Ratio) of greater than or equal to 12.
- Air conditioners with the designation of ENERGY STAR Most Efficient meet the tax credit requirements.
- System must be installed before December 31, 2022.
Heat Pumps Meeting the Following Requirements are Eligible for a $300 Tax Credit:
- Split Systems must have an HSPF (Heating Seasonal Performance Factor) of at least 8.5, an EER (Energy Efficiency Ratio) of at least 12.5, and a SEER (Seasonal Energy Efficiency Ratio) of at least 15.
- Packaged Systems must have an HSPF (Heating Seasonal Performance Factor) of at least 8, an EER (Energy Efficiency Ratio) of at least 12, and a SEER (Seasonal Energy Efficiency Ratio) of at least 14.
- ENERGY STAR certified heat pumps meet the tax credit requirements.
- System must be installed before December 31, 2022.
Are you unsure of whether your new air conditioner or heat pump qualifies for the tax credit? Ask your Symbiont Service HVAC installer. We may also be able to provide you with a Manufacturer Certification Statement.
Does My Home Qualify?
The $300 tax credit is for energy efficiency improvements to residential properties only, with some restrictions. For instance:
- It only applies to your primary residence, not a vacation home, second home, commercial property, etc.
- It is only for existing homes, not new construction.
Tax Credits for Home Builders and Commercial Properties
If you are a home builder or a commercial building owner/designer, you may be eligible for separate tax credits. Read more at the links below:
Tax Deductions for Commercial Buildings
Renewable Energy Tax Credits for GeoThermal HVAC Systems
Tax credits for renewable energy upgrades, including GeoThermal heat pumps, are also available. Learn more about the tax credit on GeoThermal systems.
How Do I Apply for the Tax Credits?
To claim the tax credits, fill out IRS Form 5695 and file it with your tax returns. The 2022 form 5695 is available here. Tax credits are administered by the IRS. For questions about how to apply, please contact the IRS or a tax professional.
*Disclaimer: The tax credit information contained within this website is provided for informational purposes only and is not intended to substitute for expert advice from a professional tax/financial planner or the Internal Revenue Service (IRS).
This post was originally published June 4, 2020. Updated January 9, 2023.
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