Congress recently extended many lapsed tax breaks, including the non-business energy property tax credit program, through December 2014. If you had upgrades made to your heating, or choose air conditioning repair that upgrades a unit to be more efficient, you might qualify for tax credit. Additionally, many US states have their own programs that might help you cover the costs of your energy upgrades. Here's what you need to know:
YOUR HOME MUST MEET CERTAIN CRITERIA.
In order to receive the non-business energy property tax credit, the home where the work was done must:
- Be an existing home rather than new construction.
- Be the primary residence of the tax credit claimant.
- Have installation of energy upgrades done in the fiscal year for which the tax credit is being claimed.
- Have appliances and equipment installed that are accompanied by a Manufacturer's Certification Statement.
This is the 2013 IRS Form 5695, which explains the details of the program. The 2014 form should be nearly identical.
THERE IS A $500 CAP ON THE CREDIT
The feds won't pay for the complete expense of your energy upgrades, but offer only a small percentage of your costs. Basically, the government's entire energy program offers between 10% and 30% reimbursement, in the form of tax credits, for various upgrades made to residential and commercial properties. Each separate program has its own budgeted credit amounts.
The cap on the non-business residential energy property tax credit is $500, with limits under that for various upgrades. For example, biomass stoves will get you up to $300 in credits, as will upgrades to central air conditioning units and air sourced heat pumps. Gas, oil and propane furnaces qualify for up to $150 in credits.
But you are limited to claiming $500 in total credits under this specific program. If you received any federal energy credits through this program from 2005 until the present, you must subtract those amounts from the $500 total.
ASK YOUR HVAC EXPERTS ABOUT OTHER PROGRAMS.
There are other federal energy tax programs that have been extended and that have different rules. Your heating and air specialists will know about these programs and how to help you qualify. They will also know which upgrades and appliances are approved for the various federal programs.
Additionally, many states have their own energy tax programs. If you have upgraded your AC system in 2014, or you plan to do so in the future, you should learn about all of the incentives available to you as a homeowner. Not only will you have lower power bills by upgrading your system, you may also get a nice bit of money back from Uncle Sam or your state government to help you celebrate your responsible commitment to energy savings.