How to Make the HVAC Tax Credit Work for You and Your Home

A federal HVAC tax credit may be in your future, but the opportunity to take advantage of it may end soon. Congress has reinstated certain tax credits on heating and cooling units and energy-related home improvements, but they must be purchased by Dec. 31. These credits apply to units that are installed in your primary residence only, and they may be a fixed amount ranging up to $300 or a percentage of the cost of the unit up to $500.

This Federal 25C Tax Credit is an extension of a program that had previously expired. However, there’s no guarantee that another extension will be granted after the end of this year. Therefore, the time to act is now. Here are some examples of purchases that are eligible for the credit.

Fixed HVAC Tax Credits

  • Residential central air conditioners with a Seasonal Energy Efficiency Ratio (SEER) rating of at least 16 qualify for a $300 fixed credit.
  • Energy Star-certified gas, oil, or propane furnaces get a $150 tax credit. Qualifying units must have an Annual Fuel Utilization Efficiency (AFUE) rating of 95 or greater. If you also install a high-efficiency blower motor with the furnace at the same time, an additional $50 tax credit is available.
  • Heat pumps deliver heating and cooling as well as high efficiency. A $300 fixed tax credit is offered for heat pumps with the following efficiency specs: a minimum HSPF (Heating Seasonal Performance Rating) of 8.5 and 12.5 EER (Energy Efficiency Rating) and a SEER of at least 15.

Percentage HVAC Tax Credits

Home improvements that support HVAC efficiency qualify for a percentage rebate, depending on the cost of the improvement. Most prominent among these are upgrades to home insulation. The tax credit for new insulation amounts to 10% of the cost of the material — labor and installation costs are not eligible — and the total credit may not exceed $500.

Ask the professionals at Paitson Bros. about how you can benefit from the federal HVAC tax credit. We’ve been your Terre Haute source of trusted sales, service, and information since 1922.

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    Jeff Paitson Jeff Paitson is a third generation business owner who continues to run the business with the same values that have been passed down from previous generations since 1922.

    Jeff’s belief is that the business belongs to Jesus Christ; therefore 10 percent of the company’s profits go toward the Maryland Community Church.

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    Ethan Ethan Rayburn is a lifelong resident of Terre Haute and a 2005 graduate of Purdue University.

    An Eagle Scout, Ethan spent four years as a non-profit executive with the Boy Scouts of America before joining Paitson Bros. as a comfort advisor and later General Manager. In that role, Ethan has brought a renewed enthusiasm for customer care, integrity, value, and service to Paitson Bros. Heating & Air Conditioning.

    Ethan enjoys singing and was a member of the Purdue Varsity Glee Club. He also enjoys playing and coaching soccer, spending time with his family and two young boys, and volunteering his time and resources with his church, Terre Haute First Baptist Church, which he has attended from a very young age.
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