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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?

UPDATED JANUARY 2020: The Non-Business Energy Property Tax Credits have been extended from 12/31/2017 through 12/31/2020. This means that the tax credit covers purchases of qualifying new HVAC equipment made before December 31st, 2020. Plus, good news – it also retroactively applies to purchases of air conditioners and heat pumps made starting December 31, 2017. If you purchased qualifying HVAC equipment between 2017-2019, ask your tax professional about amending your return for that year to take advantage of the tax 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, 2020
Claim by: April 15, 2021
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 (2006-2020) combined. If you’ve already claimed $500 from the Nonbusiness Energy Property Tax Credit since 2006, 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 2019 taxes yet due to the extended deadline, you can download the 2019 form here. The 2020 form has not been published yet. 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 Electric Water Heater. Check the entire list of qualifying appliances.

 

*Disclaimer: The tax credit information contained within this website is provided for informational purposes only and is not intended to substitute for expert advice from a professional tax/financial planner or the Internal Revenue Service (IRS).

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