We’re sure you were probably inundated with news during the turn of the New Year regarding Congress debating and passing the “Fiscal Cliff” deal. While some points of that deal were very thoroughly covered day in and day out, there may be a few things that you didn’t hear mentioned as part of the legislation. One of those pieces could be potentially valuable to homeowners. The deal signed during the first week of 2013 also reinstated a residential energy tax credit called the 25C Tax Credit.
While this tax credit last expired on December 31, 2011, the deal retroactively provides credits to eligible homeowner purchases of energy efficient appliances and equipment for their homes. The tax credit also covers such purchases moving forward, which can potentially save homeowners a lot of money in the coming year if they plan to make improvements.
For example, homeowners purchasing and installing a high efficiency air conditioner can receive a 10% credit (up to $300) for that purchase. Similarly, the installation of a high efficiency furnace could also receive a tax credit of 10% of the purchase and installation price (up to $150). There are certain efficiency standards that must be met in order for the system to be eligible, such as a 95% or higher AFUE (Annual Fuel Utilization Efficiency) rating for furnaces.
Different purchases from 2011 and 2012 that fall under eligibility status for this residential tax credit can also be combined, up to a $500 credit amount. So, if you upgraded your air conditioning unit in the Spring of 2011 and updated your furnace to a higher efficiency model this past Fall, you’re now able to combine those credits together for a larger cash amount that goes right back into your pocket. Not only will this credit put money in your pocket now, it will also pay off over the long run in energy savings from your new high efficiency HVAC equipment.
In order to qualify for the reinstated tax credit, homeowners must fill out certain forms, the revised versions of which will be available soon from the IRS. For a full list of qualifying items covered by the 25C Tax Credit, visit the bottom of this page. You can also check out the video below for an overview of the information. Also, as always, feel free to contact BelRed to talk these possibilities over with one of our highly trained professionals. Doing so could now save you hundreds!
