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When next April 15 rolls around, can you claim federal tax credits for HVAC upgrades during 2016? You still can, but only if you act fast. There are other advantages, beyond tax breaks, for making the switch to more current heating and/or cooling technology now.

You’ll almost certainly get higher energy efficiency that will in turn deliver lower monthly operating costs from day one. You’ll also benefit from new options and features, as well as more generous warranty terms.

Here are some of the tax credits to take advantage of before 2016 ends:

Cooling and Heating
  • A high-efficiency central air conditioner with a SEER (Seasonal Energy Efficiency Ratio) rating of 16 or more is eligible for a $300 federal tax credit.
  • A gas-fired furnace with an AFUE (Annual Fuel Utilization Efficiency) rating of at least 95% qualifies for a $150 federal tax credit plus an additional $50 if you also upgrade the system blower fan to an advanced variable speed model.
  • An air source heat pump with an HSPF (Heating Season Performance Factor) of at least 8.5 and a SEER of 16 or more is eligible for a $300 federal tax credit.
Water Heating
  • For a $300 tax credit on your federal return, upgrade your existing gas-fired unit to a model with a higher efficiency rating of 0.82 thermal efficiency or above 90% AFUE. Alternatively, make the switch to a heat pump water heater that also receives a $300 credit.
Insulation
  • Adding additional insulation to areas like the attic to meet today’s higher standards can get you a federal tax credit for 10% of the total cost, up to $500. It applies to standard types like fiberglass batts or blown-in cellulose loose-fill, as well as applied spray foam insulation.

Florida has no state income tax. However, homeowners here may still benefit from rebates offered by local utilities for upgrading to a new HVAC system or having certain related work performed such as ductwork testing and sealing to improve efficiency.

Ask the professionals at NisAir Air Conditioning and Heating about upgrading to receive HVAC tax credits now, before it’s too late.

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