2013 HVAC Tax Credits

The good news is that 2013 HVAC tax credits are approved, and ready to be used! The 2013 HVAC tax credits apply to energy efficiency improvements and/or for the purchase of certain HVAC equipment that meets efficiency guidelines. This equipment of course must be installed in a home in the United States that is owned by the tax payer.

There is a $500 lifetime limit on the tax credit (this began January of 2011). That means if you've received any energy efficiency tax credits from 2006 - 2010, then that counts towards your lifetime limit, and you can't go over $500. For example, if you got $800 (of then $1,500 tax credit) in 2009, then you are not eligible for anything more in 2011. If you got a $400 tax credit in 2006, then you can get an additional tax credit of up to $100 in 2011. The $500 tax credit can be on a single, or multiple products - but not more than $500 total for your lifetime.

So it seems that Uncle Sam's goal with the 2013 HVAC tax credits is to help existing homeowners who have not made the move to new equipment, to make that move.

Some good news: there are HVAC related improvements not affected by the $1500 cap. These include: You can get both the 30% tax credit (up to 1,500) and the 30% tax credit (with no upper limit). For example, you could replace your windows and get 1,500, and purchase a new geothermal heat pump and get an additional 30% tax credit (with no upper limit). However, these are non-refundable tax credits, so you can't get more back in tax credits than you pay in federal income tax The tax credits that are not limited to the 1,500 cap can be carried forward to future years. Even if you received the full 500 for the tax credits back in 2006 or 2007, you are still eligible for the full 1,500 in 2009 and 2010.

Even if you received the full 500 for the tax credits back in 2006 or 2007, you are still eligible for the full 1,500 in 2009 and 2010.

2013 HVAC tax credits by technology

Below are the high efficiency systems not affected by the $1500 cap. These include solar energy systems, solar water heaters, geothermal heat pumps and wind turbines (this incentive also includes fuel cells, but that is out of our scope here).

Solar Energy Systems Tax Credit

At least half of the energy generated by the "qualifying property" must come from the sun. The system must be certified by the Solar Rating and Certification Corporation (SRCC) or a comparable entity endorsed by the government of the state in which the property is installed. Tax Credit includes installation costs.

Note: The credit is not available for expenses for swimming pools or hot tubs. The water must be used in the dwelling. Photovoltaic systems must provide electricity for the residence, and must meet applicable fire and electrical code requirement.

Tax Credit: 30% of cost with no upper limit
Expires: December 31, 2016
Details: Must be installed in a home you own and use as a residence (no rentals, but second homes qualify).
Models: Download PDF of Approved Solar Water Heaters
How To Apply: Fill out form 5695, and then on your 1040 enter the amount on line 52

Form 1040 PDF | Form 5695 PDF

Geothermal Heat Pumps Tax Credit

Must meet the requirements of the ENERGY STAR program which are in effect at the time of the expenditure. The tax credit does include installation costs.

Tax Credit: 30% of cost with no upper limit
Expires: December 31, 2016
Details: Existing homes & new construction qualify. Both principal residences and second homes qualify. Rentals do not qualify.
Models: Download PDF of Approved Geothermal Heat Pumps
How To Apply: Fill out form 5695, and then on your 1040 enter the amount on line 52

Form 1040 PDF | Form 5695 PDF

Residential Wind Turbines Tax Credit

Must have a nameplate capacity of no more than 100 kilowatts. Tax Credit includes installation costs.

Tax Credit: 30% of cost with no upper limit
Expires: December 31, 2016
Details: Existing homes & new construction qualify. Both principal residences and second homes qualify. Rentals do not qualify. How To Apply: Fill out form 5695, and then on your 1040 enter the amount on line 52

Form 1040 PDF | Form 5695 PDF
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2013 HVAC Tax Credits
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