Do Mini-Split Units Qualify for Federal Tax Credits?

Mini-split systems provide a range of benefits, from energy-efficient heating and cooling to versatile mount options. They also qualify for federal tax credits. As a homeowner, you can claim up to 500 dollars in tax credits with a mini-split system that meets the various qualifications.

Federal HVAC Tax Credit

The Federal HVAC Tax Credit or the Non-Business Energy Property Tax was initially established in late 2020, in tandem with the Federal Energy Efficient Tax Credit. Both tax implementations allow you to earn back certain amounts of credit from any ductless mini split heat pump. The HVAC tax allows you to claim anywhere between 50 to 300 dollars or 10 percent off your mini split price. Throughout your lifetime, the max credit return you can claim from the HVAC tax is a total of 500 dollars. The Energy Efficient Tax Credit allows you various percentages off your taxes depending on when the mini-split system was installed and running.

Energy Efficient Home Upgrades

The HVAC Tax Credit consists of two major components: Qualified Energy-Efficient Improvements and Residential Energy Property Costs. Qualified Energy-Efficient Improvements include basic home upgrades that boost your home’s total energy efficiency, such as insulation, certain roof materials, exterior windows, and skylights. Residential Energy Property Costs include HVAC systems, natural gas, propane, oil mechanics, and certain water systems. You can claim credit off of both components, 10 percent from qualified energy improvements and 100 percent from residential energy property, each totaling into your lifetime max of 500 dollars.

Tax Credit Qualifications

Before being able to claim the tax credit, your mini-split system must meet certain specifications that confirm its efficiency. In order to qualify for credit claims, your system must generate a specific Seasonal Energy Efficiency Ratio (SEER), Energy Efficiency Ratio (EER), and Heating Seasonal Performance Factor (HSPF). Ideally, your system must score ratings above a fifteen SEER, twelve EER, and eight HSPF. All of these details can be found with systems certification that came with the unit during the purchase or recorded on file through the systems’ identification code.

The Federal HVAC Tax Credit joins other energy-efficient incentives like the Residential Renewable Energy Tax Credit to further encourage others to switch their energy habits to a more environmental and sustainable solution. Ductless mini-split systems are among the best energy-efficient and eco-friendly HVAC option due to their lack of vents, streamlined system, and optimized functionality, making them qualify for federal tax credits and add to their long list of benefits.