Federal HVAC tax credit renewed through 2016
Sell more efficient systems and solar upgrades, when your customers know of potential savings on their taxes
In 2015, the U.S. government renewed the 25C tax credit for high-efficiency heating and cooling equipment installed between 2012-2016. This credit is offered as part of a larger energy-efficiency incentive for home improvements.
Lennox® has updated the manufacturer certification Statement to reflect this tax credit extension through 2016 on all of our eligible high efficiency equipment in time for tax season.
Solar credit also extended
The U.S. government also extended it’s Solar Tax Credit, 25D, for homeowners who purchase and install equipment that uses solar energy to generate electricity. This extension is good through 2021.
Using the renewal to increase sales
Differentiate yourself from the competition by helping save your customer money and encourage solar spending, as homeowners receive the most benefit if they also install solar.
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
- 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 no 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.
Qualifying Air Conditioners
Qualifying Heat Pumps
95% AFUE credit for gas furnaces
95% AFUE credit for boilers
Advanced Main Air Circulating Fan Efficiency Credit
Qualifying Mini Splits
Mini-Split Air Conditioners
Mini-Split Air Heat Pumps
Qualifying Packaged Units
Packaged Systems Gas Packaged
*The 9% additional tax credit has been determined by Lennox Industries, the manufacturer, to be the calculated amount of the cost of the condensing unit attributable to costs that are allocable to the generation of solar energy and use of this solar energy in your dwelling. IRS Private Ruling Letter #201130003, dated 7/29/2011. https://www.irs.gov/pub/irs-wd/1130003.pdf. This represents the IRS’s position, as of the date of the ruling, with respect to a homeowner receiving the private letter ruling and may not be cited as precedent. Customers should consult their own tax advisor regarding their qualification for the Federal Solar Tax Credit in their particular circumstances.
** The Solar Investment Tax Credits (ITC) was extended by legislation signed on December 18th 2015. The bill extends the 30% Solar Investment Tax Credits for both residential and commercial projects through the end of 2019, and the drops the credit to 26% in 2020 and 22% in 2021 before dropping permanently to 10% for commercial projects and 0% for residential projects. – Source: Solar Energy Industries Association.