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2013 Air Conditioner & Furnace Tax Credit Information

When you are ready to make the leap and purchase new furnace or air conditioner equipment, trust Mr. Duct! Not only can we help you increase your comfort, lower you energy costs, add value to your home, and do something good for the environment, we can guide you through the 2012/2013 HVAC Tax Credit Process!
Download the Trane® Energy Tax Product Guide (pdf)

Updated Tax Incentives for Homeowners

On January 2, 2013, President Obama signed legislation extending the following tax credits through December 31, 2013 which made significant changes to tax incentives for federal taxpayers who install qualified energy efficient retrofits in their home, including higher efficiency heating, ventilation, and air conditioning (HVAC) equipment in their primary residences. An eligible taxpayer may claim up to $500 in tax credits, subject to caps based on the type of equipment installed.

You may now qualify for tax credits equal to 10% of the costs (up to a $300 limit) for installing a high efficiency central air conditioner or heat pump. You may also qualify for tax credits equal to 10% of the costs (up to $150 limit) for installing a qualified furnace. A smaller tax credit of 10% of the installed costs (up to $50 limit) is available for installing a system with an advanced main air circulating fan.

Tax Credit Details

The current tax credit offers reflect the 2013 requirements and are available until December 31st, 2013.

Product TypeTax Credit SpecificationTax CreditEffective DateFind Qualifying Equipment
ResidentialCentral A/CSplit:
EER>=13
and SEER>=16

Packaged:
EER>=12
and SEER>=14
The tax credit is for $300January 1, 2012 – December 31, 2013Go to:
Air Conditioners and Air Conditioner Coils orVariable Speed Mini-Split and Multi-Split Air Conditioners and select Yes for 'Eligible for Federal Tax Credit'.
Residential Air-Source Heat PumpsSplit:
HSPF >= 8.5
and 
EER >= 12.5
and
SEER >= 15

Packaged:
HSPF >=8
and
EER >= 12M
and
SEER >= 14
The tax credit is for $300January 1, 2012 – December 31, 2013Go to:
Heat Pumps and Heat Pump Coils or Variable Speed Mini-Split and Multi-Split Heat Pumpsand select Yes for 'Eligible for Federal Tax Credit'.
Residential Gas, Oil, Propane Furnace or Hot Water BoilerFurnaces:
Gas >= 95% AFUE
Oil >= 95% AFUE Propane >= 95% AFUE

Boilers:
AFUE>=95
The tax credit is for $150January 1, 2012 – December 31, 2013Go to:
Boilers / Furnaces and select Yes for Tax Credit Eligible under Advanced Search.
Advanced Main Air Circulating FanNo more than 2% of furnace total energy use. Read this IRS Guidance if the fan qualifies, but the furnace does not. Read AHRI Safe Harbor Proposals to IRS.The tax credit is for $50January 1, 2012 – December 31, 2013
Residential Gas, Oil, Propane Water HeaterEnergy Factor
>= 0.82
or
Thermal Efficiency
>= 0.90
The tax credit is for $300January 1, 2012 – December 31, 2013Go to:
Residential Water Heaters or Commercial Water Heaters and select Yes for Tax Credit Eligible under Advanced Search
Residential Electric Heat Pump Water HeaterEnergy Factor >= 2.0The tax credit is for $300January 1, 2012– December 31, 2013Go to:
Residential Water Heaters/Commercial Water Heaters and select Yes for Tax Credit Eligible under Advanced Search

How to Obtain the Tax Credit

To obtain the Tax Credit you must fill out an IRS form 8908. The IRS has provided the following guidance regarding the tax credits for constructing energy efficient homes.

IRS Notice 2006–27 provides guidance for the credit for building energy efficient homes other than manufactured homes.

What Is Considered a High Efficiency Furnace?

Natural gas furnaces, propane furnaces, and oil furnaces - must meet or exceed 95% AFUE. AFUE, or annual fuel utilization efficiency, is a marker of efficient fuel use. The higher the AFUE rating is on a furnace model, the more energy efficient the equipment is. It also results in lower energy costs. The Gas Appliance Manufacturers Association,www.gamanet.org, publishes a directory of certified AFUE ratings.

Advanced main air circulating fan credit - the fan must use no more than 2% of the furnace's total energy. If the fan is qualified, but the furnace is not, you will not be able to take 10% off the cost of the entire furnace.

What Is Considered a High Efficiency Air Conditioner?

A split system central air conditioner - must meet or exceed 16 SEER and 13 EER; package system central air conditioners must meet or exceed 14 SEER and 12 SEER.

An air source heat pump - must meet or exceed 15 SEER and 12.5 EER and 8.5 HSPF, in order to qualify for the tax credit. Package heat pump systems must meet or exceed 14 SEER and 12 SEER and 8 HSPF.

If I Claimed More Than $500 in Tax Credits Under the Previous Tax Credit Programs, am I Still Eligible?

No. The new law reinstates the lifetime tax credit limits, which disqualify any homeowner who has claimed more than $500 in 25c tax credits since January 1, 2005, from any further credits.

Why You Should Consider an Upgrade

Advances in technology over the last ten years mean that today's higher efficiency HVAC equipment uses less energy, runs more quietly, and provides improved indoor air quality and comfort. Moreover, by using less energy and improved refrigerants, your new HVAC equipment is better for the environment.

Most homeowners would like to reduce their energy bills with higher efficiency HVAC equipment and these tax credits help make the initial investment more affordable.

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