Carrier HVAC Federal Tax Credits and Rebates
Last Updated: July 05, 2022 • 5 min read
Author: Zach L.
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You recently purchased a Carrier air conditioner and you’ve heard about a tax credit. Unfortunately, if you purchased your air conditioner after December 31, 2021, the tax credit has ended. If you purchased a Carrier system somewhere between January 1, 2021 - December 31, 2021, and haven’t filed your taxes yet you are in luck.
There is a silver lining, the federal government has approved retroactive tax credits for this six times already. What is stopping them from doing it again? So make sure to keep an eye out for any news. We’ll update this article if there are any new updates as well.
There are still a lot of monetary benefits you can get from your newly upgraded HVAC equipment, so keep on going!
How To Be Eligible For A Tax Credit?
If the air conditioner that you have purchased has an Energy Start rating of “Energy Star Most Efficient” you are in luck! Make sure to determine the eligibility of your purchase by contacting your HVAC contractor or air conditioning dealer and asking for a copy of the Manufacturer Certification Statement for your new air conditioner unit.
If the system you purchased is a split system it needs to have an EER rating of 13 or a SEER rating of 16. If you bought a package system it needs an EER rating of 12 or a SEER rating of a minimum of 14.
What Is The Federal Tax Credit For High-Efficiency HVAC Systems?
Residential homeowners are offered a non-business energy property tax credit to install predetermined models of Carrier home air conditioners at their principal residence. If you own a rental property, a second house, a vacation, Airbnb, etc those properties do not qualify for the tax credit even if you buy a qualified cooling system. This tax credit currently has not been extended into 2022, but we are hopeful as it has been extended six times in the past.
How To Claim an Energy Credit?
To claim your energy credit it takes two documents to be filed with your tax return. These are IRS Form 5695 and the Manufacturer’s Certification Statement. If you do not have both of these documents included in your tax filing, you will not qualify for the tax credit.
We recommend you work with the Carrier contractor that installed your unit to help you prepare these documents and then work with a tax professional to review and submit them.
NOTE: There is a $500 maximum tax credit amount.
What Are Utility Rebates?
Utility companies try and incentivize the usage of every energy-efficient product in their customer’s homes. Every company is different but there are various rebate programs. We’ve used a rebate program to buy a Nest thermostat and get $25 every summer we had it enrolled with our electrical provider. There are rebates that get you free shade trees, money back on your air conditioner purchases, etc.
Energy Star's development teams have created a tool to help you find local utility rebates. All you need to do is provide your zip code. The next time you are making an appliance purchase make sure to check the tool to see if your local utility companies provide an energy rebate on specific brands or models that you are looking at purchasing. Frequently these are air-source heat pumps, central air conditioners, qualified HVAC improvements, or high-efficiency HVAC systems.
The reason these rebates are in place is to help reduce energy use and reduce heavy load during peak hours. If less energy is used then the utility company needs to have less supply during peak hours.
Tax Credit for Alternative Energy Equipment
There is currently a tax credit in the United States that will be in place until January 1, 2024, that provides incentives to install alternative energy equipment. If you install a qualifying solar water heater, solar electric property, small wind turbine, fuel cell property, or geothermal heat pumps you could qualify for up to a 26% tax credit. Most of these are classified as a renewable energy system.
The only limitation is fuel cells. Fuels cells have a maximum of $500 for each half kilowatt of capacity. Which is still pretty good.
The percentages for this tax credit are:
- 30%. If the equipment was installed and placed in service between December 31, 2016 - January 1, 2020.
- 26%. If the equipment was installed and placed in service between December 31, 2019 - January 1, 2023.
- 22%. If the equipment was installed and placed in service between December 31, 2022 - January 1, 2024.
For additional information about eligible equipment purchases please read through the official announcement from the Internal Revenue Service (IRS).
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