R&D HVAC Specials: 2016 Federal Tax Credit Information
R&D Indoor Comfort
Home > specials > 2016-federal-tax-credit-information

2016 Federal Tax Credit Information

Federal HVAC tax credit renewed through 2016

In 2015, the U.S. government renewed the 25C tax credit for high-efficiency heating and cooling equipment installed between 2012 and 2016. This credit is offered as part of a larger energy-efficiency incentive for home improvements.

What the tax credit covers

  • Up to 10% of the cost to $500, or a specific amount from $50 to $300.
  • $300 maximum credit available for qualifying central Air Conditioners, Heat Pumps, Packaged Units and Ductless Mini-Split Systems.
  • $150 maximum credit available for qualifying Furnaces and Boilers.

Solar tax credits overview

The U.S. government also extended its Solar Tax Credit, 25D, for homeowners who purchase and install equipment that uses solar energy to generate electricity. This extension is good through 2021.

  • Covers up to 9% of the total retail cost* of the Solar-Ready Heat Pump or Air Conditioner when solar modules are applied.
  • Covers 30% of the cost with no upper limit on solar module installation**

Restrictions and Limitations

  • Qualifying residences: existing homes which are principal residences. Rentals and new construction do not qualify.
  • If the homeowner claimed $500 or more of enhancements to their home’s exterior (windows, doors, skylights, insulation, roofing, etc.) from 2006 to 2014, HVAC purchases will be ineligible. If they claimed $500 or less, they may qualify for a credit, but they may not get the full dollar amount specified.
  • Homeowner will need to file IRS form 5695, and enter the product model number and indoor coil model number — build customer loyalty when you take some time to help them find it.

Download the Full Form Here