Federal HVAC Tax credit and Federal Energy Efficient Tax Credit - where to file it?

[Sparky01]

Hello All,

I installed a qualified mini split for a tax credit this year, however I'm not sure if I can get the credit on my 2022 or next year,s tax return? Thank you! 

[Opus 17]

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@Sparky01 wrote:

Hello All,

I installed a qualified mini split for a tax credit this year, however I'm not sure if I can get the credit on my 2022 or next year,s tax return? Thank you! 

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For an efficient air conditioner installed in 2022, the credit is 10% of the installed cost, with a maximum of $300, and a lifetime maximum on this credit type of $500, so if you took the credit before, you may no longer be eligible. 

Starting in 2023, the credit percentage is raised to 30% of the installed cost and the lifetime cap is removed, but if you installed an energy efficient improvement in 2022, you must follow the old law.

https://ttlc.intuit.com/community/tax-law-changes/discussion/faq-revisions-to-section-25c-energy-eff...

[LoadShow]

I keep getting this same answer over and over about how the credit  works but where is it filed on my return?  Do I need a separate form to file for the credit?  I know this edges into TurboTax’s territory and it’s something TT might not want to share but I’d just like to know. Thank you

[DoninGA]

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@LoadShow wrote:

I keep getting this same answer over and over about how the credit  works but where is it filed on my return?  Do I need a separate form to file for the credit?  I know this edges into TurboTax’s territory and it’s something TT might not want to share but I’d just like to know. Thank you

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It is a separate form that is included with your federal tax return.  IRS Form 5695, Residential Energy Credits is completed using the TurboTax interview.

To enter Home Energy Credits -

• Click on Federal Taxes (Personal using Home and Business)
• Click on Deductions and Credit
• Click on I'll choose what I work on (if shown)
• Under Your Home
• On Home Energy Credits, click the start or update button

Or enter home energy improvement in the Search box located in the upper right of the program screen. Click on Jump to home energy improvement

IRS website for Form 5695 - https://www.irs.gov/forms-pubs/about-form-5695

[mobilerun]

I'm asking the same quesiton, do mini split AC qualify for tax credits?  What happens if I installed it myself? 

[Opus 17]

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@mobilerun wrote:

I'm asking the same quesiton, do mini split AC qualify for tax credits?  What happens if I installed it myself? 

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The law specifies,

(ii) An electric or natural gas heat pump.

(iii) A central air conditioner.

A mini-split unit might qualify as a heat pump, depending on exactly how the cooling is achieved.  A mini-split is not a central air conditioner.

The appliance must also meet the applicable energy standard.  This is not "Energy Star" which is something set up by the department of energy.  For a 2022 installation, the energy standard is "meet or exceed the highest efficiency tier (not including any advanced tier) established by the Consortium for Energy Efficiency" effective for 2009.  For a 2023 installation, the energy standard is "meet or exceed the highest efficiency tier (not including any advanced tier) established by the Consortium for Energy Efficiency" for the calendar year the appliance is installed.

You can apply the credit toward the cost of the appliance plus installation.  If you did not pay for installation, you can't claim a credit for what you did not pay. 

[Sparky01]

Thank you Mobile Run!

[franklinkippy]

We installed a new heat pump system in our house in 2022.  Can you tell me if we can receive any federal  tax credits on our 2022 tax return .

[JohnW152]

It depends on the system you've installed.

According to Qualified geothermal heat pump property costs in the Instructions for Form 5695, you may be able to claim a credit for geothermal heat pump property installed.

And certain electric heat pumps may also qualify for a credit. See Residential energy property costs in the link above.

@franklinkippy

[Opus 17]

@franklinkippy 

For 2022, there is a credit for a heat pump that meets the efficiency standard, of 10% of the cost up to $300.   There is also a $500 lifetime limit on this type of credit so if you ever claimed it before, you may be limited now.  

The efficiency standard for 2022 is meets or exceeds the top tier standard that was in effect for 2009.  You may have to ask your installer.  

[Sparky01]

Thank you Franklin! Blessings to you In 2023