Your Guide to AC Units Eligible for Tax Credits in Phoenix

In the scorching heat of Phoenix, Arizona, a reliable and energy-efficient air conditioning unit is a necessity. As homeowners aim to keep their homes cool without spending a fortune, knowing about the tax credits for AC units can be helpful. We'll explore our favorite air conditioning units in Phoenix that meet the criteria for these credits.

Understanding Tax Credits
So, we know that we can get tax credits for certain air conditioning units, but what do these credits mean? When it comes to air conditioning and energy efficiency, tax credits are financial incentives provided by the government. Their aim is to encourage the use of environmentally friendly and energy-efficient HVAC systems.

The concept is simple: the government promotes the use of units that consume less energy, and they have two key reasons for doing so. The first key reason is to decrease overall energy use, and the second is to minimize environmental effects. As a result, homeowners who opt for qualifying systems enjoy these financial advantages.

Basic Requirements
Let's get into what homeowners should consider before making their purchase. We want you to maximize your savings (and ensure that you see savings in your tax return!). Let's see if you are qualified for these tax credits.
Requirements- If you own your home, are not renting it out, and are switching to an energy efficient AC, it is likely that you qualify. You also must primarily live in the home, and not run a business out of your home.
Common Question: Income Tax Credits and Filing Statuses
Your filing status does not influence this tax credit, whether you're single, married, head of household, etc. It also does not matter if you qualify for earned income tax credit (EITC). This is also not a refundable tax credit (you cannot get back more than you owe).
Below are the most common federal tax credits available through the Inflation Reduction Act (IRA). 
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Insulation:
- Tax Credit Amount: 30% of the cost, up to $1200
- Eligible Improvements: Insulation materials (e.g., fiberglass, cellulose) that meet the required efficiency criteria.

Ductwork Sealing:
- Tax Credit Amount: 30% of the cost, up to $1200
- Eligible Improvements: Sealing ducts to reduce air leakage manually or with Aeroseal.

New AC Units:
SEER 16 and above:
- Tax Credit Amount: 30% of project cost up to $600
- Eligible Improvements: Central air conditioning systems with a SEER rating of 16 or higher.

Ductless (mini-splits):
- ENERGY STAR certified heat pumps with 
- SEER2 > 16 
- EER2 > 12 
- HSPF2 > 9

Now, we'll shift our focus to air conditioning units in Phoenix that meet the criteria for these tax credits.

Best AC Units for Tax Credit in Phoenix
The IRA Tax Credit specifies the minimum SEER rating of 16 for split AC units. Any package unit that is Energy Star Certified will qualify.  While there are hundreds of manufacturers that meet the tax credit specs, I typically stay with only a handful of manufacturers. When it comes to energy-efficient AC units eligible for tax credits in Phoenix, here are our top picks

Trane XV17
Get the biggest bang for your buck with the XV17 system.  You’ll get the maximum amount of IRA tax credit available plus Trane’s variable speed technology at an affordable price.  The SEER2 rating is at 17.  The variable speed air conditioners give you more precise and even temperatures throughout the home.  This federal tax credit comes out to $600. APS is also offering an additional rebate of $200 and SRP is offering an additional $225 per ton at this time.

Trane XL17i
A step down from the XV17 is the XL17i. It has a 2-stage compressor, SEER2 rating of 16. This air conditioner is quieter than the entry level models, and provides cool air in the hottest of summers. This unit is, of course, eligible for tax credits in Phoenix, adding an extra layer of savings.

Ductless Mini Split Systems
Mini split AC systems also qualify for the IRA tax credit. They are perfect to help cool a hot room in the summer, are super efficient to operate and are very quiet. 
By opting for one of these energy-efficient AC units, you can take advantage of tax credits in Phoenix. Remember to consult with professionals for proper installation to maximize both performance and savings. 

Sources:
https://www.irs.gov/credits-deductions/energy-efficient-home-improvement-credit
https://www.energystar.gov/about/federal_tax_credits/central_air_conditioning
https://www.srpnet.com/
https://www.aps.com/en/Residential/Save-Money-and-Energy/Your-Energy-Your-Options/Rebates/AC-Upgrade-Rebate

How Tax Credits Work In Arizona
Step One: Get Your AC Unit's Details
Begin by obtaining the essential information. Start with your AC unit's manufacturer's certificate . This document provides insights into your unit's specifications and energy efficiency ratings. Download it, and you're prepared for the next steps.

Step Two: Have The Unit Installed
Use your Contract showing the cost for insulation, ductwork sealing and/ or new AC system as proof of payment for your records.

Step Three: Consult with a Professional
Enhance your energy-saving approach by consulting with a tax professional. An expert can discover additional savings and come up with more ways to take advantage of energy tax credits. Overall, this makes sure that you are maximizing the value from those energy tax credits.

Step Four: Submit Form 5695
Finish by sending in Form 5695 to the IRS. Congrats, you've officially made your claim on energy tax credits (in just a few steps!).

Please note that tax credits can change at any time, subject to IRS. Please visit the IRS.gov website for specific and updated information.

Keep Your Home Energy Efficient
Time to keep your home efficient! Just like health check-ups, our Green ID home energy audit is like a periodic check for your home's energy well-being. It's about making sure your system stays in great shape, ready to perform at its best.
Not ready to purchase a new air conditioner yet? Start saving money now with our custom home energy audit.

As a well-known energy audit firm in the Phoenix metro area, our experienced experts specialize in regular assessments. We inspect factors such as insulation quality, duct work efficiency, potential hotspots and overall exposure. Doing so ensures that your home keeps its energy efficiency.

Think of this as a step to stay on top of possible energy inefficiencies. After our thorough evaluation we share what we find and offer practical suggestions for improvements to keep your home's energy system running smoothly.

Keep Indoor Air Cool! Gain a comfortable living space with the added bonus of huge tax benefits. Make sure your home is keeping the air conditioning and energy in with an estimate from Green ID.

Call us at 602-926-1650 or book online with us today!
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