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Air Conditioner Tax Credits There are many people who are turning to mini-split air conditioners, and for a variety of reasons. They provide a lot of benefits that can add up to big savings throughout the year,as well as help save energy, and they are more environmentally friendly. Add that to that the fact that they offer more climate zone control and are ductless air conditioners and it is easy to see why so many people are turning to them. One additional advantage of mini-split air conditioners is that, depending on the model you purchase, you may qualify for a federal tax credit. Air Conditioner Tax Credits Before you run out and purchase any mini-split air conditioner or split air conditioner, it is important to know that not all of them meet the requirements for a federal tax credit. But the good news is that there is plenty of ENERGY STAR ones that do. ENERGY STAR air conditioners are those that carry the government label that backs the notion that the particular product is energy efficient. By having an ENERGY STAR mini-split air conditioner you will be saving energy and spending less money throughout the year for your heating and cooling. Some mini-split air conditioners qualify for a federal tax credit because of The American Tax Payer Relief Act of 2012. While it is also known as the ‘fiscal cliff bill,’ the extension of it


came into effect on January 1, 2013. The tax credit incentive runs through December 31, 2013. This act provides for people receiving federal tax credits for purchases such as air conditioners. The same tax credit applies to heat pumps, so if you will be replacing or purchasing a heat pump keep that in mind. You will want to make sure you choose a heat pump that qualifies for the tax credit. Here are the requirements that must first be met in order to get the federal tax credit on an air conditioner: Not all ENERGY STAR air conditioners automatically qualify for a federal tax refund. Keep this in mind when deciding on which model to purchase. Always inquire to find out if the mini-split air conditioners you are considering qualify, and if so, how much you can expect to get back. • For existing homes that are the principal residence they can qualify for a 10 percent federal tax credit. The amount ranges from $50-300. This one does not apply to new construction or rental properties. Getting the Tax Credit •

The federal tax credit for your mini-split air conditioners is dependent upon having a SEER split system of ≥ 16, or an EER ≥ 13. The SEER is the Seasonal Energy Efficiency Ratio, and the higher the number the more efficient it is. The EER is the Energy Efficient Ratio, and again the higher the number the more efficient the unit is. The higher efficiency is going to use less energy and save you money in the long run.


Once you have made sure that the mini-split air conditioners you are purchasing qualify for a tax credit the next thing to do is apply for it. How you apply for the mini-split air conditioner federal tax credit depends on which tax form you use to file your taxes. When filing your 2012 taxes you will use the following: For products purchased in 2012, use Form 5696. • If you are filing a 1040 Individual Tax Form you will enter the tax credit on line 52, which is the residential energy tax credit. • Form 5696 will be submitted with your other forms when you file your taxes. • Always save your purchase receipt and the Manufacturer’s Certification Statement. Save this with your other records for seven years in case it is ever needed. Making the Purchase •

Being able to get a federal tax credit on the mini-split air conditioner is a great incentive to make the purchase this year. While the above tax form and credit applying information is for filing your 2012 taxes, the same process will be followed next year, when filing your 2013 return. Therefore, if you purchase a mini-split air conditioner or heat pump during 2013 you will want to follow the same procedures as above in ensuring yours qualifies, saving the documentation, and filing the for the federal tax credit when you file your tax year. Mini-split air conditioners, sometimes referred to as ductless air conditioners or split air conditioners, are efficient and high quality. They provide the heating and cooling that you need, for both residential and commercial properties, but save you


money, are environmentally friendly, and offer better zone climate control. The federal tax credit just adds one more great reason to choose a mini-split air conditioner!


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