Do you have a new Carrier air conditioner, and you’re wondering if you are eligible for a tax credit for purchasing it? You’ve come to the right place, for we have researched this question, and we have the answer for you.
The tax credits for Residential Energy Efficiency ended on December 31, 2021. Extension or renewal of these credits still has pending approval from Congress. So, any new purchases of Carrier air conditioners no longer qualify for tax credits unless Congress approves the retroactive extension.
However, any Carrier unit bought between January 1, 2021, to December 31, 2021, is still eligible for a tax credit that can be claimed until April 15, 2022.
Although federal tax credits have already ended as of December 31 of 2021, there are still financial benefits that you can get from your new Carrier. The succeeding sections talk about these additional benefits, including how to file your tax credit to make it to the April 15, 2022 deadline. Read on!
How to become eligible for a tax credit?
Purchasing an air conditioner that has been rated by Energy Star as “Energy Star Most Efficient” qualifies you for a tax credit. Verify the eligibility of the product that you purchased through your HVAC contractor or dealer by requesting a copy of the Manufacturer Certification Statement for the air conditioner that you purchased.
Any split system that has at least a SEER rating of 16 or an EER rating of 13 is eligible for a tax credit. Additionally, package systems with a SEER rating of at least 14 or an EER rating of at least 12 are also eligible for a tax credit.
What is the Federal Tax Credit For High-Efficiency HVAC Systems?
The tax credit provided under this program is available only for residential owners who installed a qualified Carrier air conditioner on their primary home. This means that installations on houses other than the primary house—rest house, lakeside house, etc.—will not be eligible for the tax credit even though you installed a qualified Carrier air conditioner.
This is a personal tax credit that is part of the Energy Policy Act of 2005. It was extended multiple times. The last extension ended December 31, 2021 and has not yet been extended again.
Non-business Energy Property Tax Credit Program
It is important to remember that the tax credit is only for installing qualified systems on your existing home. This means that any installation of a qualified air conditioner in a newly constructed house or on a rental house is not qualified for the tax credit. The tax credit only covers the installation of replacements or additional installation at your current home.
Another important detail to remember is that the maximum amount of tax credit that can be received through this program is $500. The maximum amount covers the entire program period from 2005 to 2021.
What this means is that if you’ve already received a tax credit amounting to $500 at any time between 2005 and 2021, then any new installation of a qualified air conditioner will no longer give you an additional tax credit.
How to claim energy credit?
Filing of your energy tax credits revolves around two documents—the Manufacturer’s Certification Statement and the IRS Form 5695. You will not be able to qualify for the tax credits without either one.
The Manufacturer’s Certification Statement can be obtained from your Carrier dealer or contractor.
Once you’ve obtained a copy of the Manufacturer’s Certification Statement from your dealer, follow the sample steps below that show you a mock filing of the Carrier air conditioner that you recently installed:
- Download IRS Form 5695 from their website through this link:
- If you bought a qualified Carrier central air conditioning system:
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- Enter $300 in line 22a.
- Enter $300 in lines 23 & 24.
- For line 30, enter $300 too.
- If you bought a qualified Carrier central air conditioner and furnace bundle:
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- Enter $300 in line 22a.
- Then enter $150 for line 22b.
- Enter $450 for lines 23 & 24.
- For line 30, enter $450 too.
Important disclaimer
The steps we provided in the section above are only a basic guide to give you an idea of what information to enter in the air conditioner-related fields. It is not intended as a replacement for expert tax advice or professional tax preparation.
We strongly advise that you seek professional assistance to fill in any complicated fields in the form.
Most of the authorized Carrier contractors can also help you with the information that you need to enter in the form that is specific to your Carrier air conditioner. Some Carrier contractors can even help you file this form—especially if this is your first time claiming an energy tax credit.
What are utility rebates?
If you’ve already claimed your maximum $500 tax credit, you’re not out of luck.
Many utility companies issue rebates to those who install energy-efficient equipment like air conditioners in their homes. These rebates vary between states, cities, participating utility companies, and the type of appliance installed in your home.
One good example is the rebate offered by Southwestern Electric Power Company. They provide residents in the area that they serve a list of participating contractors that will help residents install Energy Star compliant appliances like air conditioners, heat pumps, smart thermostats, hybrid water heaters, and more.
The installation of an air conditioner with a SEER rating of 15 is eligible for a rebate of $75, while an air conditioner with a SEER rating of 18 or better nets a rebate of $200 under their rebate program.
The Energy Star Rebate Finder
The Energy Star website makes it easy to look for rebates in your area. Just go to this online tool and enter your zip code. Press the blue “Find Rebates” button, and it will give you all the ongoing rebate programs by utility companies in your area.
There are rebate programs listed here that have been ongoing for more than a decade!
Find out which programs are active in your area before making your next appliance purchase to take advantage of an ongoing rebate.
The Carrier home efficiency program
Carrier made it easy to plan an energy-efficient system through their website. This online system allows you to design the air conditioning system that you want and specify your priorities like low noise, energy savings, or humidity control.
At the end of the brief questionnaire, the Carrier online app will give you a list of Carrier products that fit your requirements. The list of products includes the total amount of rebates that the product you’re purchasing will make you eligible for.
There are also optional suggested products that fall under the priorities that you have selected.
You can read more about the list of products to learn more about them. Once you have learned enough about the products, you can proceed to the list of authorized Carrier experts within your area.
Access this Carrier online utility from this link.
Finding a Carrier dealer
If you have an existing Carrier system in mind and would like to look for a dealer, the Carrier website also has a utility to make this easy for you. The website application is an online Carrier Expert finder, where you enter your zip code and choose the level of filtering that the utility will do directly on the Carrier website.
The drop-down option for dealers allows you to select “All dealers,” “Carrier authorized,” or display dealers based on customer ratings. There are other options to choose from that make it easy for you to narrow down your search.
The utility also gives you the option to pick the radius where it will search with your zip code as the center. The default radius when you load the online utility is 10 miles.
How to reduce the electricity bill from your air conditioner?
In addition to the rebates that you can get from your local utility companies, you can still save money on your electricity bills by following these simple tips.
Avoid non-stop usage
This is easy to do with intelligent thermostats that monitor the temperature for you. Once your air conditioner has achieved your target temperature, an intelligent thermostat can turn it off automatically. It will only turn the air conditioner back on if the temperature rises once more.
Install proper insulation
You’re burning money if you’re using your air conditioner in a room that is not properly insulated. The heat from the sun gets transferred into the room through the walls and roof if there is no or very little insulation preventing the heat transfer.
Save money on electricity bills by installing sufficient insulation that will stop heat transfer.
Do not set temperatures that are too low
Setting a temperature on your thermostat that is too low will cause your air conditioner to work hard. You will place a heavy load on your air conditioner if you set temperatures like 65 degrees. If your air conditioner constantly works under heavy loads, it will easily break down in addition to giving you high electricity bills.
A room already feels comfortable at around 76 to 69 degrees.
Conclusion
The period for providing tax credits on air conditioners has ended, although claims can still be filed until April 15, 2022. Even without the tax credit, there are other ways to get a rebate and save money on your Carrier air conditioner.
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