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$300 Federal Tax Credit for Air Conditioners

For full information on all federal tax credits, visit energystar.gov.

Is your air conditioner eligible for a $300 tax credit? photo of ac with hand holding cash

Is Your Air Conditioner Eligible for a $300 Federal Tax Credit?

JANUARY 2022 UPDATE: The Non-Business Energy Property Tax Credits expired on December 31, 2021. Congress has not (yet) approved an extension. The tax credits apply to certain home improvements including energy efficient central air conditioners and heat pumps.

In January 2021, the tax credits were extended to cover purchases of HVAC systems and other qualifying equipment made before December 31, 2021. The also credit retroactively applies to air conditioner and heat pump purchases made in 2018 and 2019. Please consult with your tax professional for details on how to apply for the credit.

What is the Tax Credit?

Tax Credit: $300 (Maximum of $500 for all energy efficiency improvements claimed under this credit)
Purchase by: December 31, 2021
Claim by: April 15, 2022
Details: Equipment must be installed in an existing home & your principal residence. New construction and rentals do not apply.

What are the Requirements?

We recommend consulting a tax professional to ensure that you meet all of the requirements necessary to receive the tax credit. Additionally, to verify equipment eligibility, ask your HVAC contractor to provide the Manufacturer Certification Statement for the air conditioning system you purchased or plan to purchase.

Here are some of the efficiency requirements for air conditioners and heat pumps:

Air Conditioners

In order to receive a tax credit of $300, the air conditioning system must meet the following criteria:

Split Systems:
SEER >= 16
EER >= 13

Packaged Systems:
SEER >= 14
EER >= 12

Heat Pumps

Certain heat pumps also qualify for a tax credit of $300. They must meet the following criteria:

Split Systems:
HSPF >= 8.5
EER >= 12.5
SEER >= 15

Packaged Systems:
HSPF >= 8
EER >= 12
SEER >= 14

What’s the Catch?

The federal tax credit only applies to existing homes, not new construction. The home must also be your primary residence – no secondary residences or rentals. You can only claim up to a total maximum credit of $500 for all of the years (2005-2021) combined. If you’ve already claimed $500 from the Nonbusiness Energy Property Tax Credit since 2005, you won’t be eligible to claim any more credits.

How Do I Apply?

File IRS Form 5695 with your tax return. If you haven’t filed your 2021 taxes yet, you can download the 2021 form here. The credit amounts you may receive are subject to IRS regulations, so we recommend consulting a tax professional for advice on tax preparation.

Do Any Other Appliances Qualify for a Tax Credit?

Even if you don’t plan on upgrading your heating & cooling system, you might intend to purchase another qualifying household appliance like a hybrid water heater. Check the entire list of qualifying home improvements.

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