Buying a new HVAC system can be an exciting process. After the technicians finish installing your new unit, you get to enjoy significantly improved indoor comfort as well as greater energy efficiency, which helps you save money on your monthly electric bills. But you also might be asking yourself, “Can you claim a new HVAC system on your taxes?”
Thanks to the Inflation Reduction Act enacted in January 2023, homeowners can enjoy their new heating and cooling systems while saving money with different rebates and tax credits. As Holland’s trusted HVAC company, Reliable Heating & Cooling LLC can help you explore and understand all the potential benefits that come with your new HVAC system. To schedule service or learn more about HVAC installation incentives, call us at (616) 201-0978.
What the Inflation Reduction Act Means When It Comes to Buying a New HVAC System
What is the Inflation Reduction Act (IRA), and how can it save you money on your HVAC system installation? Many people also know the IRA as the climate bill. Essentially, this bill invests around $4 billion into clean technology and energy sources.
The overall goal of this bill is to help the U.S. reach its 2030 sustainability goals, which include cutting greenhouse gas emissions by 41%.
So what does this act have to do with you and your new HVAC system?
Through this bill, you get to enjoy various tax credits whenever you take steps to make your property more energy-efficient. Energy-efficient home improvements can include things like installing:
- Solar panels
- Heat pumps
- Improved insulation
- Upgraded windows
- Newer HVAC systems
- And more!
Since installing a new, energy-efficient HVAC system, like a heat pump, reduces energy usage, you can claim credits on your taxes for installing one.
What Kind of Federal Tax Credits Can You Take Advantage of?
You can benefit from pretty much any type of energy-efficient home improvement, but the rebates and tax credits available will vary depending on the type of improvement.
As a Michigan resident, you can enjoy the following rebates and tax credits:
- Rebates that cover between 50 and 100% of the purchase and installation costs for certain energy-efficient appliances, like water heaters and heat pumps
- 30% tax credit for solar panel installations with battery storage systems
- Rebates for certain repairs that boost energy efficiency
- 30% tax credit for cooling and heating upgrades
- 30% tax credit for any home improvements that help reduce energy waste and leakage
Sample Rebates for Michigan Homeowners
The exact rebate you qualify for will vary depending on several different factors. But here are some sample rebates that two-person homes in Michigan can enjoy:
- $2,500 for electrical wiring
- $2,000 for a heat pump
- $4,000 for electrical panels
- $150 for home energy audits
- $1,600 for weatherization and insulation upgrades
- $1,750 for electric or gas water heaters, hot water boilers, central air systems, gas or propane water heaters, or biomass boilers.
Pay Close Attention to SEER and HSPF
Can you claim a new HVAC system on your taxes? Yes, getting a newer and more efficient HVAC system can earn you certain tax credits and rebates. When making any attempt and creating a more energy-efficient household, you need to think about SEER.
SEER stands for seasonal energy efficiency ratio, and it measures how efficient your air conditioner or heating system is. A higher SEER rating means a more energy-efficient HVAC system.
For heating systems like air source heat pumps, look for the heating seasonal performance factor (HSPF), which also measures unit efficiency.
Paying close attention to the SEER or HSPF rating on your new HVAC system is crucial, especially if you want to qualify for any of Michigan’s rebates or tax credits. For one thing, SEER helps you compare the energy efficiency of different systems, making it a little easier for you to narrow down your options.
While systems with higher SEER or HSPF ratings tend to have greater install costs, they can actually save you a lot of money in the long term. By significantly reducing your home’s energy consumption, you can enjoy lower monthly energy bills. Plus, with proper maintenance, a highly efficient system will last you longer, so you don’t have to worry about replacing it for quite some time.
Perhaps the most important reason to look for systems with a high SEER rating is to reduce your environmental impact. By using less energy, your HVAC system contributes less to greenhouse gas emissions.
So what SEER rating should you look for? If you want to qualify for a rebate in Michigan, you need to look for a Seasonal Energy Efficiency Ratio of at least 16.
Changes You Can Make to Qualify for a Rebate
Thanks to Michigan’s various available rebates and tax credits, now is the time to invest in a more efficient HVAC system. But that’s not all you can do to qualify for rebates.
For instance, installing ENERGY STAR-rated doors, skylights, or windows can qualify you for rebates. You can also get qualified gas, propane, or oil furnaces as well as central air conditioner and other efficient heating and cooling systems.
Our Top-Rated HVAC Installation Services
Our Reliable Heating & Cooling team is passionate about helping fellow Holland property owners maximize energy efficiency while taking advantage of various rebates and tax credits. If you’re not sure where to start but know you want to make your home more energy efficient, we can help you explore your heating and cooling system options and find the best one for your house.
Give Us a Call Today
Can you claim a new HVAC system on your taxes? Thanks to the Inflation Reduction Act, you can get various rebates or tax credits just for making your home more energy-efficient. Talk about a win-win situation!
Reliable Heating & Cooling LLC can help you find HVAC systems that satisfy rebate and tax credit requirements while giving your property the efficient heating and cooling it needs to stay comfortable year-round.