The US government has extended the energy efficiency tax credit through 2021. Now, by purchasing a qualifying HVAC system, you can save on your monthly energy bills and qualify for up to $300 tax rebates.
This article will explore all the possibilities for the tax credit, explain what it entails, and show you how to qualify. We will also cover the eligible systems from each brand, so you know where to shop and what to look for to maximize your savings.
What Is a Federal Energy Tax Credit?
The Federal Energy Tax Credit is a program started by the Department of Energy in 2018. The design was to offer a tax break to homeowners that purchased and installed energy efficient systems in their homes. This includes heat pumps, central air systems, boilers, water heaters, and more.
Based on the component purchased and installed, homeowners receive a tax credit in either a percentage of the cost (up to $500) or a fixed amount (from $50 to $300). HVAC systems have a fixed amount of $300.
As of January 2021, the program was retroactively extended to cover 2017 and prolonged to include all of 2021. Currently, there is legislation being reviewed and voted on to double the credit amounts and extend the program to 2026.
Is the Tax Credit Part of the Weatherization Assistance Program (WAP)?
The Non-Business Energy Property Tax Credit is not a part of the Weatherization Assistance Program (WAP). WAP is a separate program designed to help low-income families, persons with disabilities, or those collecting any form of social security benefits.
WAP helps to lower costs or offer free services to install better weatherization in the recipients’ homes for those that qualify. Weatherproof windows and doors, insulation, and other products are covered under WAP. Most applications are designed to help lower energy costs by making the home more energy-efficient.
While those that qualify for WAP can also be eligible for the tax credit, one does not necessarily mean you qualify for the other.
What the Federal HVAC Tax Credit Covers (2017 to 2021)
The tax credit program covers a lot of different systems and energy efficient products. Based on the type and the amount, your tax credit may vary.
For example, certain products such as Energy Star rated windows, doors and skylights, insulation, and metal or asphalt roofs get a percentage of costs. The tax credit covers 10% of the total cost of materials, up to $500. It does not cover the installation of the items.
The rest of the items eligible for the tax credit get a fixed amount. As of March 2021, those items and tax credit values are shown in the table below.
|Product||Tax Credit Amount|
|Advanced Main Air Circulating Fan||$50|
|Gas, Propane or Oil Furnaces||$150|
|Gas, Propane or Oil Boilers||$150|
|Air Source Heat Pumps||$300|
|Non-Solar Water Heater||$300|
|Central Air Conditioning||$300|
What HVAC Systems Qualify for a Tax Credit?
When it comes to the HVAC side of things, there are several components and systems that qualify. However, the standards and energy efficiency ratings are different based on the system type. Let’s look at the breakdown.
|System Type||Energy Star||SEER/EER||HSPF||AFUE|
|Air Source Heat Pumps (Split)||Certified||15/12.5||8.5||N/A|
|Air Source Heat Pumps (Package)||Certified||14/12||8||N/A|
|Central Air Conditioners (Split)||Most Efficient||16/13||N/A||N/A|
|Central Air Conditioners (Package)||Most Efficient||14/12||N/A||N/A|
|Advanced Main Air Circulating Fan||N/A (must use no more than 2% furnace energy)||N/A||N/A||N/A|
|Gas, Propane, Oil Furnaces||Certified||N/A||N/A||95 (minimum)|
A split system is described as a unit with an exterior condensing unit, an interior evaporator unit, and a separate air handler. Package systems are all three components in a single housing.
Energy Star rating is based on minimum requirements, and air conditioners must meet Energy Star’s “Most Efficient” to qualify. Even if SEER/EER ratings are higher than minimums, if the unit is not Energy Star rated “Most Efficient,” it does not qualify.
Also, note that the SEER and EER ratings must both be met. The minimum guides are not an either/or, but an inclusive rating. If one fails to meet the guidelines (a lower EER, for example), the entire system will not qualify. See further below for more details on qualifications.
List of HVAC Brands Qualified for Tax Credits
Almost every brand-name HVAC manufacturer offers models that qualify for the tax credit. The number of qualifying models will vary by brand, though. Below we look at each brand and figure out which models qualify and if they have a manufacturer’s certification statement available for viewing.
Goodman Air Conditioners is one of the top rated and most popular brands available. It stands to reason that they also offer plenty of models that qualify for the tax credits. In fact, there are three split system ACs and 12 package AC systems that qualify.
The split system models are all from the GSX series, including the GSX16, GSXC16, and the GSXC18. The package systems include all of the GPC series models as long as they are at least 14 SEER and over 2 tons (1 ton and 1.5 ton do not qualify).
2. American Standard
American Standard also produces several models that meet minimum tax credit requirements. As one of the largest selling brands in the US, American Standard Air Conditioners are known for their reliability, affordability, and ease of install.
They currently offer a dozen models for the tax credit from their silver, gold, and platinum lines. The best selling of those models includes the following model numbers.
For Silver systems models 4A7A6, 4A7A4, 4A7A3, 4TTB6, 4TTB4 and 4TTB3 qualify. The Gold series includes models 4A7A7 and 4A7A5. Finally, the Platinum series offers models 4A7V0, 4A7Z0, 4A7V8, and 4A7A6.
Manufacturer’s Certification Statement available here.
Lennox Air Conditioners may be one of the most rugged and durable brands out there. They offer several lines, each with models that qualify for the tax credit. While the base model numbers will vary, it is in the specifics that you find the models that actually meet minimum standards.
For example, in the SL series, only the 18, 21, and 26 SEER models qualify. Of those models, only the 2 ton and larger models meet standards.
For a complete list, you can check out the Lennox website. However, a basic list will include the SL, XC, EL, ACX, and ML lines. If your model is one of these listed lines that is 14 SEER or higher (heat pump) or 16 SEER or higher (AC) that is a 2-ton capacity or higher, it most likely qualifies.
Manufacturer’s Certification Statement available here.
When you need reliability and performance power, Trane Air Conditioning is at the top of most lists. They also offer plenty of models that qualify for tax credits in both split and package systems. You will need to do a bit of digging and verifying, though. Like most major brand names, their packaged unit model numbers include versions that do not qualify.
For their split systems, though, there are nine models that do pass the mustard. The XV, XL, and XR systems include models 4TTV0, 4TTV8, 4TTX8, 4TTR7, 4TTX6, 4TTR6, 4TTL6. 4TTR4 and 4TTR3.
The package families that qualify are the 4TCC4, 4TCY4, and 4TCY5. Again, not all models in those families qualify, so look for the 2 ton or larger models and those with at least 14 SEER.
5. Other Brands
While it may be improbable to list every possible unit and model number that qualifies for the tax credits, you should know what to look for. Finding the manufacturer’s certification statement isn’t always posted online but can be found through your installer, the brand’s customer service line, or emailing customer support.
Let’s take a look at the other brands, their most popular models, and where to find their certification statements. You can also click the brand name to see a full review of their specific lineups.
|Brand||Total Series/Models That Qualify*||Most Popular Models||Certification Statement|
|Amana||10||AVXC20, ASXC16, AXS16||Online (split and package)|
|Bryant||14||189BNV, 180C, 127A, 126CNA, 116B||Supplied through dealer or installer|
|Carrier||10||24VNA0, 24ANB7, 24ACB7, 24AAA6||Supplied through dealer or installer|
|Coleman||4||Echelon AC21, LX CC7||Supplied through dealer or installer|
|Daikin||23||DX20VC, DX16TV, DX16SA||Online (split and package)|
|Rheem||7||Prestige RA20, Classic Plus RA17, Classic RA16||Online|
|Ruud||7||Ultra UA20, Achiever RA17||Online|
|York||4||Affinity CZH, LX Series YCG, LX Series YCJF||Contact Customer Service, or through installer|
|Tempstar||6||TVA9, TSA5, N4A7||Supplied through dealer or installer|
|Payne||3||PA16NW, PA17NA, PA16NA||Supplied through dealer or installer|
|Comfortmaker||6||CVA9, CCA7, N4A7||Supplied through dealer or installer|
|Heil||6||HVA9, HCA7, N4A7, NXA6||Supplied through dealer or installer|
|Ameristar||2||A4AC6, M4AC6||Supplied through dealer or installer|
|Day & Night||6||CVA9, CSA6, N4A6, NXA6||Supplied through dealer or installer|
|Grandaire||1||WCA6||Supplied through dealer or installer|
*Total number is for a series count. There may be one or more unique models per series/family that qualify.
Who is Eligible for This Program & How to Apply
The qualifications are fairly straightforward. In the easiest terms, you must be the homeowner and live in the home (primary residence). The home must also be preexisting.
This means that rental properties and new construction do not qualify for the tax credit. The system must also have been purchased between 2017 and 2021 and installed within 90 days of purchase.
Note that if the legislation does pass to extend the dates to 2026, the date-specific qualifications may change.
If you have a qualifying unit and pay annual income taxes, you must file for your tax credit. A single form (IRS Tax Form 5695) must be filled out and submitted with your tax return. Instructions for filling out the form can be found here.
Note that this is a tax credit, and not a tax deduction. A deduction lowers the amount of taxable income. For example, if you have an income of $35,000 and a tax deduction of $500, your total taxable income becomes $34,500.
A tax credit lowers the amount of taxes you have to pay. For example, if you are required to pay $1000 in taxes and have a tax credit of $300, you then only owe $700. If you get a refund instead of owing, you can still qualify for the tax credit as long as the amount of taxes you have paid throughout the year is higher than the credit you are claiming.
If you do not pay taxes, you cannot claim the tax credit.
You must also have the Manufacturer’s Certification Statement on hand. You are not required to submit this certificate (which can be found on most brand websites).
According to EnergyStar.gov, a Manufacturer’s Certification Statement is “a signed statement from the manufacturer certifying that the product or component qualifies for the tax credit.”
People Also Ask (FAQ)
Do geothermal systems qualify for tax credits?
Geothermal systems do qualify for tax credits. However, with the Consolidated Appropriations Act of 2021, geothermal systems, wind turbines, and fuel cells are on a gradual step-down incentive. If your system was installed before December 31, 2019, the tax credit is 30%, 26% if installed by January 1, 2023, and 22% if installed by January 1, 2024.
Does a new HVAC qualify for tax credit?
New HVAC systems qualify as long as they meet minimum requirements. An HVAC system must be Energy Start Most Efficient rated, with a minimum SEER and EER value based on the type of system. However, new systems installed in new construction areas do not qualify. The home must be preexisting and upgrading to a newer, more efficient HVAC system.
Does 16 SEER AC qualify for a tax credit?
Almost every SEER 16 HVAC system will qualify, yes. However, you must ensure that the system also meets minimum EER values (13 EER for split systems, 12 EER for packaged systems). If both ratings are not met, the system will not qualify.
Is there an energy tax credit for 2020?
Yes. The Non-Business Energy Property Tax Credits were set to expire December 31, 2020. However, it has been extended through December 31, 2021, and retroactively back to January 1, 2017.
Can you write off a new HVAC system on your taxes?
Depending on your circumstances, probably not. However, business owners are now allowed to expense their heating and air conditioners (up to $5000) if they qualify. A CPA or tax specialist will know if your business qualifies or not and how to properly claim the HVAC system. Residential systems are only allowed to claim the tax credit as mentioned in this article.
Can I get a tax credit for insulation?
Yes. Insulation qualifies for a 10% tax credit on the cost of materials. This is true for energy efficient doors and windows, too. The 10% credit does not include installation of the insulation, though, only materials.
The Non-Business Energy Property Tax Credit helps qualified homeowners get a tax break when they purchase and install a new, energy efficient HVAC system.
While there are minimum qualifications, most new HVAC systems do qualify for the full $3000 tax credit. Meeting the minimum requirements, having the right paperwork on your purchase, and filing the correct form are needed to claim the credit.
Last Updated on January 19, 2022
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