What You Need to Know About 2015 – 2016 HVAC Federal Tax Credits

By: Brian Schutt  |  January 20, 2016

How much will it cost?

We know that sometimes—most times—the decision whether or not to upgrade or repair your home’s heating, ventilation and air conditioning (HVAC) equipment falls squarely on the answer to this question.

No matter how great the advertised bells and whistles and promised customer service, if it’s too pricey, you’re not buying it. And we get that. We’re homeowners too, after all, and we go through the same purchasing angst when considering major enhancements to our houses.

And to make the best buying decision for your family, you need to know not only how much you may spend, but also how much you may save. And to that end, below are the 2015 2016 Federal HVAC Tax Credits on residential heating, ventilating, and air conditioning equipment. You may find it helpful when running the numbers on your next HVAC investment:

Natural Gas, Propane or Oil Furnace | $150.00

Applies to a new furnace that uses the combustion of fuel and air to create heat and meets an AFUE (Annual Fuel Utilization Efficiency) rating of 95 or higher. More info on AFUE ratings.

Central Air Conditioning | $300.00

This tax credit applies to new split air conditioning systems with a SEER (Seasonal Energy Efficiency Ratio) of 16 or higher and EER (Energy Efficiency Ratio) split systems of 13 or higher. It also applies to new package systems with SEER ratings of 14 and up, as well as EER ratings of 12 and up.

To check your system’s eligibility, Homesense is always happy to provide the Manufacturer Certification Statement for the equipment you plan to purchase, or you could also search the manufacturer’s website.

Gas, Propane, or Oil Hot Water Boiler | $150.00

This tax credit, which includes installation costs, applies to new heating units that use water circulated throughout the home in a system of baseboard heating units, radiators, and/or in-floor radiant tubing. To be eligible, the unit must meet an AFUE rating of 95 or higher.

Air Source Heat Pumps | $300.00

Heat pumps, which in simplest terms use electricity to move heat from a cool space into a warm space, can be great alternatives to furnaces and air conditioners. In the spring and summer months, heat pumps move the heat from inside your cool house to the warm outdoors. And in the fall and winter months, the reverse is true—moving heat from the cool outdoors into your warm house.

To be eligible, new split systems must reach SEER ratings of 15 or higher, EER ratings of 12.5 or higher, and HSPF (Heating Seasonal Performance Factor) ratings of 8.5 or higher. And new package systems must reach SEER ratings of 14 or higher, EER ratings of 12 or higher, and HSPF ratings of 8 or higher.

Advanced Main Air Circulating Fan | $50.00

To be eligible, these fans or blower motors—which efficiently push warm air from your furnace through your duct system—must use no more than two percent of the furnace’s total energy.

If you have any questions about your system and its tax credit eligibility, please don’t hesitate to contact us online or by phone at (317) 670-0171.

Brian Schutt

About 

is the co-owner of Homesense Heating | Cooling. Born and raised in Indianapolis, he loves the city and its people, and is committed to bringing a servants mindset into the heating and cooling industry. One of the ways he does that is to translate the technical language of HVAC into the manageable and understandable for homeowners.

Have a question? Tweet him and you'll get an answer promptly.

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