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Take Advantage of 25C Tax Credits to Install New Heating and Air Conditioning

The hubbub over the income tax debate at the end of 2012 drowned out some good news for Manassa VA homeowners: The legislation also renewed the 25C tax credit for installing new heating and air conditioning systems. This credit rewards taxpayers for replacing old, energy-sucking systems with ultra-efficient, eco-friendly heating and cooling units. The even better news is that the credit is retroactive to installations completed in 2012. 

The 25C tax credits are worth a maximum of $500 no matter how many separate items you purchase and install. Some of the credits are based on a percentage of the cost; others are a flat amount regardless of the amount of money spent. Everyone's tax situation is different, but there are some basics that you'll need to know.

  • The credit allows $300 for a highly efficient AC. A split system must be 16 SEER and 13 EER or better. A package system needs to be 14 SEER and 12 EER
  • Electric heat pumps also quality for a $300 credit. An air-source pump must be rated at least 15 SEER, 12.5 EER and 8.5 HSPF to be considered highly efficient. A package system needs to hit 14 SEER, 12 EER and 8 HSPF. 
  • Exterior doors and windows, insulation, special roofing, water heaters and biomass stoves also qualify for 25C tax credits. 
  • The credit can only be taken once, and the program dates back to 2006. If you've claimed the energy-efficiency tax credit before, you probably can't use it again.
  • The tax credit is currently slated to end Dec. 31, 2013.

In addition to the 25C tax credit program for new heating and air systems, there is also a tax credit available for geothermal heat pumps. This program allows a tax credit of 30 percent of the total system cost, including installation, with no upper limit. The credit applies to second homes as well as principal residences, but it is not in effect for rental properties. The program expires at the end of 2016.

While the 25C tax credits are a great bonus, you don't have to look any further than your monthly utility bill if you need a reason to upgrade your system. You may not realize this, but the U.S. Department of Energy estimates that replacing a 12-year-old air conditioner with an Energy Star model could shave about 30 percent off the cost of cooling your home. Since heating and cooling costs account for about half of the typical family's energy budget, it makes sense to look for ways to save.

If Griffith Energy Services installed a qualifying new heating and air conditioning product for you in 2012, we can help make sure you have the proper documentation to claim the credit. When you're ready to think about an upgrade, let our NATE-certified technicians guide you through the options. We've been serving the Manassa VA region for more than 100 years, so you can count on receiving expert service. Let Griffith Energy Services help you start saving money today.

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