25c Federal Tax Credit for HVAC Equipment


On January 3, 2013, the Federal government renewed the Residential Energy Section 25c Tax Credit.  The tax credit was retroacted to January 1, 2012 and will be effective through December 31, 2013.

  • New effective dates: January 1, 2012 through December 31, 2013
  • Maximum amount eligible for claim: Any qualified equipment installed in 2012 or 2013 is eligible for  this credit.  The cumulative maximum amount of tax credit that can be claimed by a taxpayer for all years  combined is $500.
  • Homeowner eligibility: Since the credits have lifetime caps, homeowners who have claimed $500 or more in Section 25c tax credits since 2005 are ineligible for additional Section 25c credits.  Plus, as before, installation must be on homeowner’s primary home.  *HOMEOWNERS: Please note that tax forms for claiming credits on their 2012 taxes will not be available until mid-February 2013.
  • Efficiency ratings:  Section 25c increases the qualifying standards for oil furnaces and natural gas, oil or  propane hot water boilers to 95% AFUE.  The qualifying standards for natural gas and propane furnaces  remain at 95% AFUE.  Central air conditioners and heat pumps must achieve highest efficiency tier  established by the consortium for Energy Efficiency.
Tax Credit Eligible Equipment
Efficiency Requirement
$300 Central A/C (Split-System) 16 SEER & 13 EER
$300 Central A/C (Packaged System) 14 SEER & 12 EER
$300 Heat Pump (Split-System) 15 SEER; 12.5 EER; 8.5 HSPF
$300 Heat Pump (Packaged System) 14 SEER; 12 EER; 8.0 HSPF
$150 Boiler (Natural Gas/Oil/Propane) 95% AFUE
$150 Furnace (Natural Gas/Oil/Propane) 95% AFUE
$300 Water Heater (Electric heat pump) Energy factor of at least 2.0
$300 Water Heater (Natural Gas/Oil/Propane) Energy factor of at least 0.82 or thermal efficiency of at least 90%
$50 Advanced Main Circulating Fan Must use less than 2% of the furnace’s total energy

Section 25c also includes provisions for building envelope improvements, including insulation materials and systems, exterior doors and windows, and pigmented metal or asphalt roofs.  Read more from DSIREusa.org.

What about solar and geothermal?  The tax credits for qualifying solar and geothermal products remain at the previous 30% levels through December 31, 2016, and have no cap.  Products included in this segment can be installed in new or existing homes, and include items on the following list.  For more details about solar and geothermal incentives, visit EnergyStar.org.

  • Geothermal Heat Pumps
  • Solar Panels
  • Solar Water Heaters
  • Small Wind Energy Systems
  • Fuel Cells

Precise Air Systems has a wide range of products that qualify under the new Section 25c guidelines.  Visit your local store today for assistance!

Weather forecast by WP Wunderground & Denver Snow Service