Have you been holding off on upgrading your heating or cooling system waiting for the right deal? Now is the time to act. Not only will replacing your furnace, air conditioning system and/or water heater help you save energy and save on your utility bills, but new tax credits will help lower your tax bill, too.
What are the 25C tax credits?
The 25C tax credit plan might look familiar. These are the same credits that were allowed to expire at the end of 2011. Congress reinstated them with the so-called “Fiscal Cliff” budget and tax measure at the end of 2012. If you missed the program the first time it was offered, the credits reward homeowners with credits of up to $500 per item for making qualifying improvements to their primary residence. (Rental properties and second homes are not covered under this program.)
If you happened to have made the right improvements during 2012, Congress also included the tax year 2012 when it reinstated the credits. Your HVAC contractor can help you sort out the details.
Applying for the tax credits is easy. You simply file IRS form 5695 with your 2013 tax return by April of 2013 (or amended 2012 return for the 2012 credits.) The credits are automatically deducted from what you owe or get added to your refund.
What products are eligible for the tax credits?
A variety of products are covered under the 25C tax credit plan. However, not every energy-saving item qualifies. It’s a good idea to consult with your trusted HVAC contractor to make sure the item you’re considering will be covered. Just a few categories covered under the tax credit program (with varying amounts of tax credits) include:
- Furnaces
- Central air conditioning systems
- Water heaters
- Boilers
- Heat pumps
If you’d like to explore how a new furnace, heat pump, A/C or water heater in your Twin Cities area home can help lower your energy bills and your tax bill, please contact us at Marsh Heating & Air Conditioning.
Our goal is to help educate our customers in Minneapolis-St. Paul, Minnesota about energy and home comfort issues (specific to HVAC systems). For more information about tax credits and other HVAC topics, download our free Home Comfort Resource guide.
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