If you recently bought new heating and cooling equipment, or other purchases supported by Energy Star, you could get a $500 tax credit!
Background
For years now, Energy Star and the U.S. government have worked together on an incentive program, to give people tax credits for residential energy efficiency. After all, Energy Star is all about using less energy to help the environment. If you’ve done your part by investing in a high-efficiency heating and cooling system, or other environmentally-friendly home purchases, you could receive a $500 tax credit. (Or, even more!)
Can I still purchase qualifying equipment now?
Yes, you can! That’s the reason we’re publishing a blog about tax credits and 2021 tax returns so early. Because, if you want your purchases to qualify for these credits, you need to make the purchase by December 31, 2021.
Any Energy-Star-approved heating and cooling equipment purchased between December 31, 2017, and December 31, 2021, is eligible. And while there’s a chance that the program could be extended once again for future years, it’s not guaranteed!
One last thing to keep in mind is that only purchases made for your primary residence count. So if you’ve got a vacation home or rental property, the energy efficiency tax credits cannot be applied.
What do I need to do to get the $500?
In order for your purchase to qualify, it has to meet Energy Star’s qualifications. For example, for a typical package A/C system (not a split system), it must have a SEER rating of at least 14. Then you’ll receive a $300 tax credit! For a gas furnace, it must have an AFUE of 95 or greater, and you’ll receive a $150 tax credit! There are also several other qualifying equipment purchases, such as a new water heater, boiler, or heat pump, and we’ll let you check the Energy Star website to learn more about those.
There are also other home improvements that qualify for tax credits! Home insulation, metal/asphalt roofs, and Energy-Star-approved windows/doors all qualify for a tax credit of 10% off the cost, up to $500! But once again, keep in mind that in order to receive the $500 credit, you must have made these home renovations between December 31, 2017, and December 31, 2021.
Last but not least, there’s a smaller potential to earn even more money! If you install a geothermal heat pump, wind turbine, solar energy, or fuel cell / fuel stove in your home, you can recoup up to 30% of the costs! While that is certainly generous of Energy Star, we know it won’t apply to the average homeowner, so we’ll just let you visit the website to learn more.
In summary, Energy Star and the government have made it quite easy to get free money for your high-efficiency heating and cooling system, or other purchases! If you’re interested in buying a new system for your Orange County home, contact us online or give us a call: (714) 613-1016