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Unlocking HVAC Tax Credits: The Inflation Reduction Act Explained

Inflation Reduction Act Explained

Greetings, Austin homeowners!

With the recent introduction of the Inflation Reduction Act (IRA), there’s never been a better time to invest in energy-efficient HVAC systems. At McCullough Heating & Air Conditioning, we’re here to guide you through the process, helping to ensure that you maximize your savings and enjoy the benefits of a modern, efficient HVAC system.

What is the Inflation Reduction Act (IRA)?

The IRA is a federal initiative to reduce inflation by promoting energy-efficient practices among homeowners. One of the critical features of this act is the extension and increase of the “25C” provision of tax credits for homeowners who invest in qualifying energy-efficient HVAC systems.

Which HVAC Systems Qualify for the Tax Credits?

The IRA focuses on high-efficiency HVAC systems that meet specific energy-saving criteria. These include:

  1. Central Air Conditioners: Systems with a SEER (Seasonal Energy Efficiency Ratio) rating of 16 or higher.
  2. Heat Pumps: Systems with an HSPF (Heating Seasonal Performance Factor) of 8.5 or higher.
  3. Furnaces: Natural gas, propane, or oil furnaces with an AFUE (Annual Fuel Utilization Efficiency) of 97% or higher.

How Much Can You Save?

The tax credits vary based on the type and efficiency of the system:

  1. Central Air Conditioners: 30% of the net installed cost, up to $600
  2. Heat Pumps: 30% of the net installed cost, up to $2000.
  3. Furnaces: 30% of the net installed cost up to $600.

How to Obtain Your Tax Credit:

  1. Choose a Qualifying System: Consult with one of our McCullough Heating & Air Conditioning experts to select a system that meets the IRA criteria.
  2.  Installation: Keep all receipts and the Manufacturer’s Certification Statement once your system is installed.
  3. Tax Time: When filing your federal taxes, use IRS Form 5695 (Residential Energy Credits) to claim your credit. Include the form with your tax return.
  4. Consult a Tax Professional:  Federal income tax regulations and forms can be daunting and individual tax situations vary widely between people. .  McCullough recommends speaking with a tax professional if you have questions about your personal tax situation.

In Conclusion

The Inflation Reduction Act offers a fantastic opportunity for homeowners to upgrade their HVAC systems while enjoying significant tax savings. At McCullough Heating & Air Conditioning, we’re committed to helping our Austin community make the most of this opportunity. Whether you’re considering a new system or need assistance with the tax credit rebate forms, we’re here to help.

Upgrade, save, and stay comfortable with McCullough Heating & Air Conditioning!

Note: Always consult a tax professional to ensure you meet all requirements and maximize your benefits.

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