2021 Air Conditioner Tax Credits

August 9, 2021

Many new air conditioners installed in 2021 are eligible for a federal tax credit up to $300.

The Consolidated Appropriations Act of 2021 provides tax credits for qualified residential heating and cooling equipment that meets certain energy efficiency requirements. The equipment must be installed in your primary residence. Businesses, new construction homes, rentals, and secondary homes do not qualify. Installation must be complete no later than Dec 31, 2021.

The tax credits may be applied to select high efficiency air conditioners, heat pumps, and ductless heating and cooling systems. Bailey offers several qualifying air conditioners.

Air conditioners must have a SEER (Seasonal Energy Efficiency Ratio) of 16 or higher to qualify. See all requirements here: https://www.energystar.gov

If you are considering purchasing a new air conditioner, a high efficiency model will cost more to install, but it will include a number of comfort benefit, and in most cases these systems offer significant cost savings through reduced energy bills over time.

You can download the tax credit form here: IRS Form 5695. This should be filed with your 2021 tax return. Also note, this tax credit retroactively applies to new air conditioners installed between 2018 and 2020. We suggest you consult with a tax professional with filing questions.

If you’d like an estimate for a qualifying system, please call us for a free in-home assessment.