Posted: February 24, 2020
Good news! To encourage homeowners to invest in high-efficiency systems and certain other energy efficiency home improvements, Congress recently extended a tax credit program to help homeowners save money. The tax credit is not only valid through December 31, 2020, but is retroactive to December 31, 2017.
This means that if you installed a qualifying system or made certain other energy efficiency improvements in the past two years, you can still apply. Check with your tax preparer to see if you qualify. And if you didn’t, you should consider updating your system this year so you can save money on heating and cooling expenses.
The tax credit varies. In some cases, it can be 10% of the total cost, up to $500 for home improvements like windows, doors and new insulation. In other cases, the credit is limited to a specific amount.
In the case of a high-efficiency furnace or boiler, (gas, propane or oil), you can qualify for a $150 federal tax credit. If you’re ready to replace your old central air conditioning system, you can qualify for a $300 tax credit. A $300 tax credit is also available for qualifying gas, oil or propane water heaters.
One note to keep in mind is that these Non-business Energy Property Tax Credits must be for an existing home and your primary residence. Credits in this residential category do not apply to new construction or rentals. However, the tax credit for builders of energy-efficient homes and tax deductions for energy-efficient commercial buildings have also been retroactively extended, through December 31, 2020.
If you’ve been putting off making those home improvements or purchasing that new comfort system, 2020 is the perfect time to take action. Not only will you enjoy some bonus money in tax credits, but the energy-efficient improvements will help you save money on your energy bills, year after year.
To read more specifics about these tax credits, go to the Energy Star website. And please contact us to learn about other savings incentives that may be available when you replace your old heating or cooling equipment.