Tax Provisions

HVACR Tax Provisions

Helping ACCA Members Grow Their Businesses

HVAC Contractor Workforce Development

A TOP PRIORITY FOR ACCA IS THE EXTENSION OF TAX PROVISIONS SUCH AS 25C AND 179D.

HVAC Contractor Workforce Development

ACCA's tax incentive page is here to compile information related to tax provisions that are beneficial to ACCA members. ACCA believes that tax provisions like these provide opportunity for members to grow their businesses and promote sales.

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The non-business energy property tax credit provides homeowners with a tax credit for investments in certain high-efficiency heating, cooling, and water-heating appliances. The Non-business Energy Property Tax Credits have been retroactively extended from December 31, 2017 through December 31, 2020.

Residential Energy Property Costs

Air Source Heat Pumps
heatpump

Heat pumps that are ENERGY STAR certified meet the requirements for this tax credit.

Tax Credit Amount: $300

Requirements

Split Systems:

HSPF >= 8.5

EER >= 12.5

SEER >= 15

Package systems:

HSPF >= 8

EER >= 12

SEER >= 14

See Definitions.

More Information

How to apply

Central Air Conditioning (CAC)
ac

Air conditioners recognized as ENERGY STAR Most Efficient meet the requirements for this tax credit. To verify tax credit eligibility, ask your HVAC contractor to provide the Manufacturer Certification Statement for the equipment you plan to purchase.

Tax Credit Amount: $300

Requirements

Split Systems:

SEER>= 16

EER >= 13

Package systems:

SEER >= 14

EER >= 12

See Definitions.

More Information

How to apply

Gas, Propane, or Oil Hot Water Boiler
boiler

Gas powered boilers that are recognized as ENERGY STAR Most Efficient meet the requirements of this tax credit.

Tax Credit Amount: $150

Requirements

AFUE >= 95

Tax Credit includes installation costs.

See Definitions.

More Information

How to apply

Gas, Propane or Oil Furnaces and Fans
furnace

Gas furnaces that are ENERGY STAR certified (except those for U.S. South only) meet the requirements for the furnace tax credit. Gas and oil furnaces that have earned the ENERGY STAR include fans that meet the requirements of the fan tax credit.

Tax Credit Amount: $150

Requirements

AFUE >= 95

More Information

How to apply

Water Heaters (non-solar)
water heater

Gas, Oil, Propane Water Heater

Certain ENERGY STAR certified gas water heaters meet the requirements for this tax credit. Water heaters account for 12% of the energy consumed in your home.

Tax Credit Amount: $300

Requirements

Energy factor >= 0.82 OR a thermal efficiency of at least 90%.

See Definitions.

More Information

How to apply

water heater

Electric Heat Pump Water Heater

Most ENERGY STAR certified water heaters meet the requirements of this tax credit. Water heaters account for 12% of the energy consumed in your home.

Tax Credit Amount: $300

Requirements

Energy factor >= 2.2

See Definitions.

More Information

How to apply

Advanced Main Air Circulating Fan

An Advanced Main Air Circulating Fan is an efficient fan, or blower motor which blows the air that your furnace heats up through the duct system.

Tax Credit Amount: $50

Requirements

Must use no more than 2% of the furnace's total energy.

More Information

How to apply

Biomass Stoves
biomass stove

Biomass stoves burn biomass fuel to heat a home or heat water. Biomass fuel includes agricultural crops and trees, wood and wood waste and residues (including wood pellets), plants (including acquating plants), grasses, residues, and fibers.

Tax Credit Amount: $300

Requirements

Thermal efficiency rating of at least 75%

More Information

How to apply

Wood Burning Efficiency & Safety

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Qualified Energy Efficient Improvements:

Please note: Tax Credit DOES NOT INCLUDE INSTALLATION FOR THE FOLLOWING PRODUCTS:

Insulation
insulation

Adding adequate insulation is one of the most cost-effective home improvements that you can do.

Tax Credit Amount: 10% of the cost, up to $500 (NOT INCLUDING INSTALLATION)

Requirements

Typical bulk insulation products can qualify, such as batts, rolls, blow-in fibers, rigid boards, expanding spray, and pour-in-place.

Products that air seal (reduce air leaks) can also qualify, as long as they come with a Manufacturers Certification Statement, including:

Weather stripping

Spray foam in a can, designed to air seal

Caulk designed to air seal

House wrap

NOTE: Tax Credit does NOT include installation costs.

See Definitions.

More Information

How to apply

Insulation efficiency through Home Performance with ENERGY STAR

Heat & Cool Efficiently at Home

Roofs (Metal & Asphalt)
roofing

This tax credit is for ENERGY STAR certified metal and asphalt roofs with pigmented coatings or cooling granules designed to reduce heat gain. Certified roof products reflect more of the sun's rays, which can lower roof surface temperature by up to 100F, decreasing the amount of heat transferred into your home.

Tax Credit Amount: 10% of the cost, up to $500 (NOT INCLUDING INSTALLATION)

Requirements

"Metal roofs with appropriate pigmented coatings" and "asphalt roofs with appropriate cooling granules" that also meet ENERGY STAR requirements.

NOTE: Tax Credit does NOT include installation costs.

More Information

How to apply

Windows, Doors, & Skylights
window door skylights

Windows, doors and skylights that earn the ENERGY STAR save energy, improve comfort and help protect the environment.

Tax Credit Amount: 10% of the cost, up to $500, but windows are capped at $200. (NOT INCLUDING INSTALLATION)

Requirements

Must be ENERGY STAR certified.

You do not have to replace all the windows/doors/skylights in your home to qualify. And it doesn't need to be a replacement either - installing a new window where there wasn't one previously (like in an addition) qualifies.

Tax credit does not include installation costs.

See Definitions.

More Information

How to apply

For updated information from the IRS, you can visit their website or see the following forms:

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179D COMMERCIAL BUILDING ENERGY EFFICIENCY TAX DEDUCTION

The Commercial Buildings Energy Efficiency Tax Deduction primarily enables building owners to claim a tax deduction for installing qualified systems. The 179D tax deduction has been retroactively extended for commercial buildings built after December 31, 2017 through December 31, 2020.

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179D calls for a tax deduction of up to $1.80 per square foot is available to owners or designers of commercial buildings or systems that save at least 50% of the heating and cooling energy as compared to ASHRAE Standard 90.1-2007 (or 90.1-2001 for buildings or systems placed in service before January 1, 2018). The deduction is available for buildings or systems placed in service after December 31, 2017 through December 31, 2020. Partial deductions of up to $.60 per square foot can be taken for measures affecting any one of three building systems: the building envelope, lighting, or heating and cooling systems.

You can learn more about 179D here.

ACCA FIGHTS FOR FUTURE TAX INCENTIVES

ACCA continues to push for a more robust energy efficiency tax package. We have worked with Congress and secured the introduction of the Home Energy Savings Act. This legislation would extend the 25C tax credits through 2026. It would also increase homeowners' incentives to improve their efficiency by:

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  • Increasing the credit from covering 10% to 15% of the cost of efficiency upgrades
  • Raising the lifetime cap on the credit from $500 to $1,200 to encourage multiple efficiency projects
  • Increasing incentive caps for individual product categories, e.g. raising the credit for a high-efficiency air conditioner investment from $300 to $600
  • This legislation would also require homeowners to ensure their system was installed according to ACCA's Quality Installation Standards
  • Read more about the Home Energy Savings Act

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