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Where does Form 5695 address a packaged hvac unit. Commonly referred to as a "Gas Pack". What line do I put this packaged unit?

This unit provides electric A/C and natural gas heat for residence. IRS only addresses A/C unit or Gas furnace individually.
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AmyC
Employee Tax Expert

Where does Form 5695 address a packaged hvac unit. Commonly referred to as a "Gas Pack". What line do I put this packaged unit?

They are both energy efficiency home improvements. Form 5695, part II, section A with your credit on line 18b.

 

Energy Efficient Home Improvement Credit (Part II)

Section A—Qualified Energy Efficiency Improvements

You may be able to take a credit equal to 30% of the sum of:

 

  1. The amount paid or incurred for qualified energy efficiency improvements installed during 2023,

  2. The amount of the residential energy property costs paid or incurred in 2023, and

  3. The amount paid or incurred for home energy audits during 2023.

However, this credit is limited as follows.
  • A total combined credit limit of $1,200 for qualified energy property.

  • A credit limit of $600 for any qualified energy property item.

  • A combined credit limit of $600 for all exterior windows and skylights.

  • A credit limit of $250 for any qualifying exterior door and $500 total for all qualifying exterior doors.

  • A combined credit limit of $2,000 for heat pump and heat pump water heaters; biomass stoves and boilers.

  • A credit limit of $150 for home energy audits.

Reference:

Energystar is a government agency with details for every year and credit.

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6 Replies
AmyC
Employee Tax Expert

Where does Form 5695 address a packaged hvac unit. Commonly referred to as a "Gas Pack". What line do I put this packaged unit?

They are both energy efficiency home improvements. Form 5695, part II, section A with your credit on line 18b.

 

Energy Efficient Home Improvement Credit (Part II)

Section A—Qualified Energy Efficiency Improvements

You may be able to take a credit equal to 30% of the sum of:

 

  1. The amount paid or incurred for qualified energy efficiency improvements installed during 2023,

  2. The amount of the residential energy property costs paid or incurred in 2023, and

  3. The amount paid or incurred for home energy audits during 2023.

However, this credit is limited as follows.
  • A total combined credit limit of $1,200 for qualified energy property.

  • A credit limit of $600 for any qualified energy property item.

  • A combined credit limit of $600 for all exterior windows and skylights.

  • A credit limit of $250 for any qualifying exterior door and $500 total for all qualifying exterior doors.

  • A combined credit limit of $2,000 for heat pump and heat pump water heaters; biomass stoves and boilers.

  • A credit limit of $150 for home energy audits.

Reference:

Energystar is a government agency with details for every year and credit.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

Where does Form 5695 address a packaged hvac unit. Commonly referred to as a "Gas Pack". What line do I put this packaged unit?

Thank you for your help but section 18 does not address hvac units. Section 18 addresses insulation solutions  

section 24 addresses gas furnaces. But a packaged gas pack hvac is one unit providing electric a/c and gas heat. 
kindly review again please. 
sincerely

 

AmyC
Employee Tax Expert

Where does Form 5695 address a packaged hvac unit. Commonly referred to as a "Gas Pack". What line do I put this packaged unit?

I see, thank you for the clarification. While section A could work as energy efficient improvement section B does seem to fit your situation better. You will need to answer all of the questions in the section. Instructions for Form 5695 Part II section B states:

To figure the credit, enter the amounts you paid for these items on the appropriate lines of Form 5695, Part II. The amount allocable to you is the smaller of:

The amount you paid, or The qualifying credit of the property.

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.

 

Energystar  states: The central air conditioner also needs a blower motor – which is usually part of the furnace – to blow the cool air through the duct system. The only way to ensure that your new air conditioner performs at its rated efficiency is to replace your heating system at the same time. 

 

The gas furnace alone has a limit of 30% or $600. Furnaces (Natural Gas, Oil) Tax Credits

This tax credit is effective for products purchased and installed between January 1, 2023, and December 31, 2032.  Gas Furnaces

ENERGY STAR certified gas furnaces with AFUE > 97% are eligible.

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Where does Form 5695 address a packaged hvac unit. Commonly referred to as a "Gas Pack". What line do I put this packaged unit?

Amy thank you so much for the help. At the risk of overstaying my welcome, I guess we can agree that the unit best belongs in Section B. And as Section B currently defined, the unit being both a package of A/C and gas heat doesn’t have a specific home. There should be a $1200 credit line for the cost of a packaged unit ($600 for A/C and $600 for furnace. Is my thinking of splitting this $9000 investment between both A/c line and Furnace  line totally unjustified?

So many thanks

sincerely

Vanessa A
Employee Tax Expert

Where does Form 5695 address a packaged hvac unit. Commonly referred to as a "Gas Pack". What line do I put this packaged unit?

Yes, it is possible but ONLY if you have a breakdown on your receipt of the cost for the central AC and then a separate cost for the furnace with labor costs spit between the 2 as well.  In case of a question by the IRS, you would need to have that information available.  You cannot estimate on the cost of one or the other.  If your invoice is not broken down to show you the itemized costs, you can contact your contractor to get this breakdown.  Then when you get this breakdown you can enter the cost for the AC and the cost for the furnace and claim the $600 credit for each unit.  

 

 

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Where does Form 5695 address a packaged hvac unit. Commonly referred to as a "Gas Pack". What line do I put this packaged unit?

Vendor can’t do. Many thanks to you. Appreciate your patience and support. 

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