It’s tax season, and just like everybody else, you’re probably looking to get the biggest possible refund by taking advantage of tax credits and deductions. The good news is there are a number of HVAC and efficiency improvements that qualify for tax credits.
Nonbusiness Energy Property Credit
Firstly, it’s crucial to know that you’re no longer able to claim the nonbusiness energy property credit on your 2018 return. That’s because it expired at the end of 2017. For this credit, you could claim 10 percent of the costs incurred for energy efficiency improvements like:
- Home insulation
- Metal and asphalt roofing materials
- Exterior doors, windows, and skylights
You could also claim 100 percent of the residential energy property costs, which included:
- air source heat pumps
- non-solar water heaters
- central A/C systems
- oil, natural gas or propane furnaces
- advanced circulating fans
If you made home improvements in 2017 or before but didn’t claim the qualifying tax credits, you could file amended tax returns for the years in which the improvements were made.
Residential Renewable Energy Credit
If you made an energy saving improvement to your home in 2018, you could take advantage of the Renewable Energy Tax Credit. You can claim 30 percent of the costs you incurred for solar, geothermal, and wind equipment in your primary residence and second home. The credit doesn’t have an upper limit.
This credit also includes fuel cell equipment installed in your primary residence. It’s also equal to 30 percent of the cost but has a maximum limit of $500 for every one-half kilowatt of power capacity. That means a 4kW fuel cell would qualify for a $4000 credit.
To claim your energy-efficiency credit, you’ll need to use the form 5695.
It’s clear that it pays to do your homework when upgrading your HVAC equipment or making any other energy-saving improvements. If you need professional advice on the energy-efficient equipment you should purchase to qualify for incentives like tax credits and rebates in the central New Jersey area, contact the home comfort experts at Aggressive Mechanical Contractors.