Claiming a New HVAC System on Your Taxes

Hey there! You know what question we get all the time at our office? “Can I deduct my new HVAC system on my taxes?” I get why people ask these systems aren’t cheap, and who doesn’t want a little financial relief come tax season?

The short answer is: sometimes you can! But like most tax questions, it depends on several factors. Let me walk you through what you need to know about HVAC systems and potential tax benefits, based on our experience helping folks all across Northfield, Minnesota and surrounding areas.

New HVAC Systems and Taxes: What Actually Qualifies?

Not every heating and cooling system is going to earn you a tax break. Here’s when you might be able to claim yours:

First, energy-efficient upgrades are your best bet. If you’ve invested in a system that meets ENERGY STAR® standards, you could be looking at some nice federal tax credits. The Inflation Reduction Act of 2022 expanded these credits for high-efficiency equipment like qualifying heat pumps, air conditioners, and furnaces. This is definitely where most homeowners find tax benefits.

Second, think about whether your HVAC work counts as a home improvement versus a repair. Adding central air for the first time or completely upgrading your heating system might fall into the home improvement category, which could increase the cost basis of your home. Why does that matter? It might help reduce capital gains taxes when you eventually sell your house.

Third, if your HVAC system is for a rental property or commercial building, different rules apply compared to your personal residence. You might be able to deduct costs as a business expense or depreciate the system over several years.
Look, I know “taxes” can make anyone’s eyes glaze over, but with the right documentation and circumstances, that HVAC investment might give you more financial benefits than just energy savings.

When You Need to Call the Pros

I’m not one to push service calls unnecessarily, but there are times when you shouldn’t wait to get professional help with your system.

Here’s when you should pick up the phone right away:

• That burning smell? It’s not “just dust burning off” like some people think. It could signal electrical problems with your wiring or motor.
• If your system keeps turning on and off rapidly (we call this “short-cycling”), something’s wrong. Not only is it annoying, but it’s likely driving up your energy bills and causing unnecessary wear and tear.
• Weird noises are another red flag. Your HVAC shouldn’t sound like a rock concert. Rattling, banging, or high-pitched screeching usually means something’s loose, broken, or about to fail.
• Getting cool air in winter or warm air in summer? That’s a clear sign your system isn’t working right. Same goes for sudden spikes in your energy bills without explanation – your system is probably working overtime to compensate for an underlying issue.
• Moisture around your unit or unexplained puddles are never good news. This often points to refrigerant leaks or drainage problems that need immediate attention.

And here’s something many people don’t think about if you’re planning to sell your home, having us evaluate your HVAC system beforehand could be smart. We can help you understand how an upgrade might affect your home’s value and potentially give you tax benefits too.

Remember, we’re not just here for installations. We want to make sure your system works efficiently for years to come.

The Process: What to Expect When You Call Us

I think it helps to know what happens when you reach out for HVAC help, so here’s our typical process from start to finish:

First, we listen. When you call, you’ll talk to an actual human being from our team – not a confusing automated system. No long hold times, just someone who understands what you’re dealing with.

Next, we assess what’s going on. We’ll get a technician to your home to inspect your current setup and give you honest feedback. I can’t stand when companies try to upsell unnecessarily, so that’s not how we operate.

After the assessment, we’ll lay out your options clearly. You’ll get a detailed breakdown of what’s working, what isn’t, and what makes the most sense for your specific situation and budget.

We install or repair quickly – there’s a reason “One Hour” is in our name! Our service trucks are stocked with parts and equipment, so we can often fix problems the same day.

Finally, we help with the paperwork. If your new system qualifies for tax credits, we’ll make sure you have everything you need – from model numbers to energy ratings and proper receipts to claim those benefits when tax season comes around.

FAQ: A New HVAC System and Taxes

I find that people often have similar questions about HVAC systems and tax benefits, so let me address some of the most common ones:

Does every new HVAC system qualify for a tax credit?

Honestly, no. Only certain energy-efficient models qualify. When you work with us, we can help you select one that meets the criteria if tax benefits are important to you.

How much can I get back on my taxes?

It varies quite a bit. Some federal credits can be up to 30% of the cost, though there are usually caps on the total amount. I always recommend checking with your tax professional or the IRS website for the most current information.

What paperwork do I need to keep?

Hold onto your invoice, the Manufacturer’s Certification Statement (which we provide if your system qualifies), and if you’re claiming a residential energy credit, you’ll need IRS Form 5695 when you file your taxes.

Can I claim the full system cost in one tax year?

For your primary residence, yes – tax credits typically apply in the same year the system was installed. But for rental properties, you may need to depreciate the cost over several years according to IRS guidelines.

Will you tell me if my new HVAC system qualifies for tax benefits before installation?

Absolutely! We’ll review your options and clearly identify which systems might qualify for tax credits before you make any decisions.

Let’s Keep It Real

Look, I understand that you work hard for your money and want it to stretch as far as possible. Whether that means cooling your home more efficiently or getting some tax relief, I get it I’m a homeowner too.

That’s why our team approaches every job as if we were working on our own homes. We don’t talk in circles or use confusing technical jargon to sound smart. We’re here to do the job right, explain things clearly, and stand behind our work.

I’ve been in this business long enough to know that straightforward, honest service is surprisingly rare these days. But that’s what we promise at SouthSota One Hour Heating & Air Conditioning.

Reach Out – Good Help Is Just a Call Away

If you’re considering a new HVAC system—whether for comfort, efficiency, or potential tax benefits—give us a call. We’ll discuss your specific situation and determine the best solution for your home and budget.

No pressure, no sales tactics – just helpful advice from people who understand both HVAC systems and how they might affect your taxes. Because staying comfortable in your home shouldn’t be complicated, and neither should understanding the financial benefits of your investment.

Remember, a more efficient system saves you money every month through lower utility bills and might even save you some money on your taxes. That’s what I call a win-win!