Home energy credit for air conditioners - Turbo Tax max at $600, should be $1200?

[sharpnado]

Per the IRS publication below, the max credit should be $1200.  However, when I enter in Turbo Tax, it maxes out the credit at $600.   I installed 2 x air conditioners and should be eligible for $600 each, up to $1200.  I don't see any way to enter the number of units installed, only the total cost.

Home energy tax credits | Internal Revenue Service (irs.gov)

[Vanessa A]

No.  The max credit is $600 for AC, not per AC unit.  So, it doesn't matter if you installed one or 5, your credit is limited to $600 for Air Conditioners. 

To get the $1,200, you would need to have done other things as well like windows, doors or insulation.  

The overall Home Energy Efficiency Improvement Credit is limited to $1,200 for all items but the biomass boilers or furnaces.  These two items allow you to claim an additional $2,000 for the Home Energy Efficiency Improvement Credit.  

[sharpnado]

Thanks for the reply.

From the IRS pub, this is what I am reading.  The bold line shows that it should be 30% of the cost, up to a maximum of $1200.    So, I'm still a bit confused how you are getting $600.

======Pasted From the IRS Link=====

These expenses may qualify:

• Exterior doors, windows, skylights and insulation materials
• Central air conditioners, water heaters, furnaces, boilers and heat pumps
• Biomass stoves and boilers
• Home energy audits

The amount of the credit you can take is a percentage of the total improvement expenses in the year of installation:

• 2022: 30%, up to a lifetime maximum of $500
• 2023 through 2032: 30%, up to a maximum of $1,200 (heat pumps, biomass stoves and boilers have a separate annual credit limit of $2,000), no lifetime limit

[sharpnado]

To clarify, I read it as 30% of the cost of improvements in those areas, not $600 per item type.

Trying to find where the $600 maximum is listed.

[DoninGA]

@sharpnado   IRS Form 5695 Residential Energy Credits instructions (2023) page 3 - https://www.irs.gov/pub/irs-pdf/i5695.pdf#page=3

The credit limit for each property is as follows.
• $1,200 for insulation or air sealing material system.
• $250 for one exterior door and $500 for all exterior doors.
• $600 for windows.
• $600 for central air conditioners.
• $600 for natural gas, propane, or oil water heaters.
• $600 for natural gas, propane, or oil furnace or hot water boilers.
• $600 for improvements or replacements of panelboards,
subpanelboards, branch circuits, or feeders.
• $150 for home energy audits.
• $2,000 for heat pumps and heat pump water heaters; biomass
stoves and biomass boilers

[sharpnado]

Thank, I just saw that as well.

Efficient air conditioners*

$300

30% of cost, up to $600

Appreciate the input!

[Vanessa A]

 It is 30% of the cost of the improvement with a $600 maximum credit for central air conditioners. 

One more thing.  You say 2 air conditioners.  Are these central air units or window units?  Window units do not qualify for the credit.  

[sharpnado]

Thanks Vanessa, I found the $600 limit on the energy.gov page.  

These were central units, not window. 

Appreciate the quick help!

[Ann2023tax]

I think the IRS form and the energystar.gov website are not in agreement with each other. Energystar.gov says in bold letters, when you click on the "air source heat pump', "You can claim 30% of Project cost $2,000 maximum amount credited". So my $6,000 air-conditioned should have provided a tax credit on $1800, but the form limits it to $600. Another example of unclear government bureaucracy. 

[KrisD15]

It depends what you mean by "Air Conditioned".

If it is a small unit, but energy efficient, it would be limited to $600.

Select "Central air conditioners" 

If it is a Heat Pump System (and judging form the cost I am inclined to think it is) and cost $6,000, the limit is $1,800.

Select "Heat pumps (electric or natural gas) 

(If I'm wrong, and it is just an air conditioner, the credit is limited to $600)