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What HVAC Systems Qualify for a Tax Credit?


Happy couple checking tax credit paperwork on line in a tablet sitting on a couch in the living room at home

Most homeowners don’t realize that the type of heating and air conditioning equipment they have may be eligible for a tax credit, thanks to the Energy Policy Act of 2005.

Purchasing a qualifying high-efficiency HVAC system throughout 2022 is covered by this tax credit, meaning you could save significantly on the cost of your heating and cooling investment.

But which systems qualify for these tax credits, and how much will homeowners receive for qualifying units? The answers lie in the blog below — read on to find out how much you could receive in tax credits by choosing the right HVAC system.

How Do Energy Tax Credits Work & How Much Will I Get?

The tax credit system is much less complicated than one might expect: Thanks to these credits, homeowners will receive a credit against their taxes for an amount equal to 10% of the amount paid for the equipment up to $500.

Alternatively, homeowners may receive a specific amount between $50 and $300, depending on the system they have.

Tax credits are generally given out, with the highest amounts awarded to the most energy-efficient systems. To understand which systems yield the highest tax credits, homeowners must be aware of the following measurements for energy efficiency:

  • SEER: Seasonal Energy Efficiency Ratio measures how much heat is removed by an air conditioner or heat pump in watt-hours. The higher the ratio, the more efficient the AC unit will be.
  • EER: Energy Efficiency Ratio measures how efficiently an air conditioner or heat pump operates when temperatures are at least 95º F.
  • HSPF: Heating Season Performance Factor is the ratio of heat output from a heat pump to the energy it consumes.
  • AFUE: Annualized Fuel Utilization Efficiency is the percentage used to rate a furnace’s heating efficiency, with higher percentages representing higher efficiency rates.

It can be difficult to find the specific information for each of these measurements, which is why it’s recommended that you contact a knowledgeable HVAC technician who can help you better understand the ins and outs of your units before scheduling system replacement.

Air Conditioning Systems That Qualify for a Tax Credit

Different types of HVAC equipment yield different tax credits for homeowners. Depending on the efficiency rating for your air conditioner or heat pump, you could be eligible to receive a $300 tax credit.

The following table illustrates the required energy efficiency ratings for each system in order for homeowners to qualify:


Unit Type SEER Rating EER Rating HSPF Rating

Air Source Heat Pump Split System

15 12.5 8.5

Air Source Heat Pump Package System

14 12 8

Central AC Split System

16 13

Central AC Package System

14 12

Heating Systems That Qualify for Tax Credits

In the same way that air conditioners and heat pumps must meet specific requirements to be eligible for a tax credit, so must heating systems adhere to these regulations. Gas, propane, and oil furnaces and fans must have an AFUE rating of at least 95% to be eligible for a $150 tax credit.

Speak to a knowledgeable heating technician to understand which heating systems are available that meet these requirements, so you can reap the benefits come tax time.

Take Advantage of HVAC Tax Credits With Waldrop!

At Waldrop, our team understands the different requirements that HVAC equipment must meet to be eligible for available tax credits. Let us help you select the most beneficial system for your home comfort and wallet by scheduling heating or air conditioning replacement services with our team today.

Call (864) 536-0887 to schedule!

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