New HVAC system

[Flyers815]

New hvac system installed in 2023. Am I able to get a credit for this?  What would I need for support and what to fill out?

[MelanieC1]

Hi @Flyers815 !  Thank you for joining us this morning!

For qualifying central air conditioners installed in your primary residence in tax year 2023 you can claim a tax credit of 30% of the total project with a max benefit of $600. 

To verify that your unit qualifies as an Energy Star Most Efficient Unit you can check this link: be found at the link here.   EnergyStar

Complete the Form 5695 within TurboTax to claim the credit for tax year 2023.  Type 'residential energy credit' in the Search area, then click on 'Jump to residential energy credit.'

Thank you!

Melanie, CPA

[Andrew_W]

Hi Flyers815,

Yes, there is a credit for new energy efficient HVAC systems. The Energy Efficient Home Improvement Credit is reported on Form 5695. The credit is generally 30% of the cost of the improvements, with annual limits that vary by the energy efficient item that was purchased. The overall limit for the credit annually is $1,200, but there are different limits for different energy efficient items.

For HVAC improvements, there is a $600 annual limit per item, which includes: 

• Central air conditioners
• Natural gas, propane, or oil water heaters
• Natural gas, propane, or oil furnaces and hot water boilers

This credit is non-refundable, so will only offset tax liabilities, and does not carryforward to future tax years if the entire credit is not used. Also, only items purchased and installed to an existing primary residence qualify.

In terms of substantiating the credit, nothing is required besides form 5695 when you complete your return. You will want to keep purchase records/receipts documenting the energy efficient item purchased.

For additional information, this article is helpful regarding this credit: https://turbotax.intuit.com/tax-tips/home-ownership/energy-tax-credit-which-home-improvements-qualif...