It seems that the fiscal cliff news had the attention of most Americans. Did you know that as part of the American Taxpayer Relief Act of 2012, which was signed in early January 2013, the Residential Energy Efficiency Tax Credits were retroactively reinstated? To say that simply, the federal tax credits that expired at the end of 2011 are back! The tax credits are available for energy efficient improvements made to your home between January 1, 2012 through December 31, 2013. What exactly does this mean for you? What qualifies as high efficient? How much are the tax credits? How do you claim the tax credit? It’s time to dish the details!
What does this mean for you? If you purchased certain high efficient equipment or made high efficient improvements in 2012 or plan to make a high efficient purchase in 2013, you may be eligible for this federal tax credit. Improvements include the installation of high efficient furnaces, air conditioners, and heat pumps. Other eligible improvements include high efficient water heaters, windows, doors, insulation, and some roofing materials.
What qualifies as high efficient? Qualifying equipment includes 95% or higher efficient gas furnaces, split system air conditioners that achieve 16 SEER and 13 EER, split system electric heat pumps that achieve 15 SEER, 12.5 EER and 8.5 HSPF and advanced main air circulating fan (found in gas, propane, or oil furnaces) that use no more than 2% of the total energy usage of the furnace. Your heating and cooling company will provide you with an AHRI certificate which certifies that the new equipment meets these specifications.
How much are the tax credits? The tax credit is $150 for qualifying furnaces, $300 for qualifying air conditioners, $300 for qualifying heat pumps, and $50 for qualifying fans. The total amount of the tax credit is capped at $500. If the tax credit was taken in the amount of $500 in a previous year, you can’t take it again.
How can I claim the tax credit? The tax credit is claimed on your 2012 or 2013 taxes, depending on the year the improvement was made. It’s always best to consult with your accountant to properly claim the credits. Since the tax credits are retroactive and available to be claimed on 2012 tax returns, the IRS is having to update their system. Therefore, if you’re claiming the tax credit, you may not be able to file your taxes before the end of February.
If you are considering new HVAC equipment, now is the time to consider high efficient. In addition to the federal tax credits, most utility companies are still offering rebates for high efficient equipment as well. Also take into consideration the energy savings over the years and it really adds up! Feel free to contact Renee at 317.430.1716 or renee@LCSheatingandcooling.com if you have questions or would like to discuss.