When it’s time to invest in a new heating or cooling system for your home, there are many things that you want to take into consideration. One is the potential tax incentives and rebates you may be eligible for when you purchase certain types of HVAC systems. We’re going to dive into more detail below about what these potential incentives and rebates are so that you can choose the appropriate system.
Inflation Reduction Act of 2022
One of the most notable tax incentives is on the federal level under the Inflation Reduction Act of 2022. The Act allows eligible homeowners to claim up to $3,200 in the form of a tax credit when they purchase a new qualified heating or cooling system for their home. Find a list of systems that qualify for this incentive on the ENERGY STAR website.
Essentially, homeowners who purchase eligible systems can claim up to 30% of the total cost of the system plus installation up to the $3,200 maximum. With this tax incentive, homeowners will receive a credit on the amount of federal income tax that they owe. For example, let’s say that you’re eligible for the entire $3,200 maximum credit. If you owe $4,000 in federal income taxes, you can reduce that amount to just $800. Under this incentive, you will not receive a refund from the IRS. However, you can roll over the remaining tax credit into the following year.
ENERGY STAR-Certified Systems
In order for your system to be eligible for the tax credit, it needs to be ENERGY STAR-certified. Different types of HVAC systems will qualify for different maximum amounts, with some reaching the $3,200 federal maximum amount. Air conditioning systems can make you eligible to receive up to $600 as long as your unit has a 16 SEER2. Gas furnaces with an AFUE rating of 97% or higher make you eligible to receive up to $600.
A ducted heat pump with a 15.2 SEER2 or higher rating and an 8.1 HSPF2 rating or higher makes you eligible to receive up to $2,000. Mini-split heat pumps are eligible for up to $2,000 if they have a 15.2 SEER2 rating or higher and an 8.5 HSPF2 rating or higher. Geothermal heat pumps with an ENERGY STAR rating are eligible for the whole $3,200.
How to Claim a Tax Credit
It’s important to first verify that the system you’re thinking about purchasing qualifies you for the tax credit by visiting ENERGY STAR’s website. If your system does qualify, then you can proceed with filing for the tax credit for the year that you purchased the system. In order to claim the tax credit under the Inflation Reduction Act of 2022, you’ll need to fill out IRS Form 5695 Residential Energy Credits and submit it alongside your regular tax forms to the IRS.
Local Program Rebates
The Spire High-Efficiency Rebate by Laclede Gas is offered to all their current customers who invest in a new home heating system. You can receive from $200 all the way up to $300 when you purchase a qualified high-efficiency heating system for your home. You can discover the particular rebate amount and which systems qualify by visiting SpireEnergy.com. Homeowners will need to fill out a rebate form and will receive a credit on their energy bill for the rebate amount.
Ameren Missouri offers a Pay As You Save (PAYS). This isn’t exactly a rebate. Rather, it’s a financing plan to help make getting a new HVAC system more affordable for your home. Under this program, you need to get a home energy audit and can invest in various energy-efficient upgrades. Ameren will front the up-front cost of the new HVAC system and spread its price out over a set term on your energy bills.
Under the PAYS program, the monthly payment sticks with the home, even if you sell it. So, you don’t have to worry about continuing to pay for energy upgrades on a house that you sold. There are various other programs specific to communities throughout the Missouri area that can provide you with rebates to help recoup some of the cost of upgrading to a new, more energy-efficient HVAC system.
Helpful HVAC Installation Service
Bone Heating & Cooling offers helpful HVAC installation service to the Festus, MO area. We can also assist with all your HVAC repair and maintenance needs. Simply call our office to book your next service consultation with one of our staff members or to learn more about maintenance agreement.
