If you’ve been putting off that crucial upgrade to your home’s HVAC system for financial reasons, there’s no better time to make the decision than now. Generous federal energy tax credits are set to expire at the end of 2013, so act soon and ease the financial burden of purchasing new, energy-saving equipment for your Arkansas home.
The legislation creating these tax credits was first passed in 2008 to induce Americans install more energy-efficient equipment in their homes and save money on energy bills as well as help reduce harmful greenhouse gas emissions. They expired at the end of 2011, but were reinstated last January as part of the “fiscal cliff” budget deal. The reinstatement covers qualified purchases in 2013, as well as retroactively to all of 2012.
The credit covers 10 percent of the total cost of an upgrade or a specific amount between $50 and $300, depending on the equipment. Only upgrades for existing, primary-residence homes are eligible. The credit is not available for equipment installed in new homes or rental properties. This tax program has a lifelong cap of $500 for whatever combination of energy tax credits you take.
To be eligible for the energy tax credit, equipment must meet certain energy-efficiency standards. For example, a split-system central A/C must have a SEER (Seasonal Energy Efficiency Ratio) of 16 or higher and an EER (Energy Efficiency Ratio) of at least 13. A central A/C package system should have a SEER of 14 or more and EER of 12 or higher. A furnace should have an Annual Fuel Utilization Efficiency (AFUE) of at least 95 percent. These ratings measure how effectively a unit uses the energy required to run it. The higher the rating, the more money you will save on energy costs over the life of the system. These ratings are universal, so comparing different units is easy.
To receive the energy tax credits, you must file an IRS form 5695. Be sure and keep all receipts pertaining to the purchase and installation of your new equipment; they may be required during the application process. Also, you should receive a certificate from the equipment manufacturer stating that the equipment is eligible for the credits. Hold on to that document for your records as well.
To explore tax credit-qualified options for your home, please contact us at Paschal Heat, Air & Geothermal. We’ve been serving northwest Arkansas for over 40 years. Our expert team has solutions for all your heating, air conditioning and geothermal needs.
Our goal is to help educate our customers in Northwest Arkansas about energy and home comfort issues (specific to HVAC systems). For more information about energy tax credits and other HVAC topics, download our free Home Comfort Resource guide.
Image courtesy of Shutterstock