Are you considering doing some electrical work in your own home? Whether it's just swapping…
Is it time to replace your home’s aging or inefficient cooling and heating system? Are you considering using your tax return to help pay for it? If the answer is yes to these questions, then recent legislation may enhance your tax return and make it more affordable to purchase a new system.
The Residential Energy Efficiency Tax Credit, renewed retroactively from January 1, 2015 through December 31, 2016, applies to any qualified equipment installed in 2015 or 2016. This is good news for many homeowners who are planning to use their refunds to finance a new HVAC system.
According to information at http://www.energystar.gov/taxcredits, the following are some eligibility requirements and additional details of the tax credit:
- Efficiency improvements or equipment must serve a dwelling in the United States that is owned and used by the taxpayer as a primary residence.
- The credit applies to the purchase of high-efficiency heating, cooling and water-heating equipment.
- Tax credit is 10% of cost up to $500 or a specific amount from $50-$300. The maximum tax credit for all improvements is $500.
- If tax credits of $500 were made in previous years, any purchases made in 2011-16 will be ineligible.
- High-efficiency heating, cooling and water-heating equipment eligible for tax credits, and their credit caps include:
- Natural gas, propane, or oil furnace or hot water boiler with an annual fuel utilization rate of 95 or greater: $150
- Electric heat pump water heater with an energy factor of at least 2.0: $300
- Electric heat pump that achieves the highest efficiency tier established by the Consortium for Energy Efficiency: $300
- Central air conditioner that achieves the highest efficiency tier established by the Consortium for Energy Efficiency: $300
- Natural gas, propane, or oil water heater that has either an energy factor of at least 0.82 or a thermal efficiency of at least 90%: $300
- Geothermal heat pumps up to 30% of cost with no cap
- Biomass stoves that use plant-derived fuel available on a renewable or recurring basis, including agricultural crops and trees, wood and wood waste and residues (including wood pellets), plants (including aquatic plants), grasses, residues, and fibers. Systems must have a thermal efficiency rating of at least 75% to qualify: $300
This tax credit reinforces the decision to replace an aging/inefficient system now instead of waiting until it breaks down. This pre-emptive approach works primarily for 2 reasons: first, it can help avoid costly repairs that may be a temporary fix and, two, a new system will be more efficient and help save homeowners on their utility bills in the future.
So, if you are planning to make these improvements or purchases, now is a great time to move forward. Call Dixie today for more details. To find out how to apply for the tax credit, click here.