The Real Estate Bloggers

2013 Tax Credit For Replacing Your AC, Furnace, or Water Heater

Posted: 20 Jan 2014 09:53 AM PST

If you are like me and had to replace a furnace in 2013, or replaced an air conditioner or even put in a new water heater, you may be eligible to get a tax credit on your 2013 taxes that you will be filing before April. 2013 was the last year you could claim these energy efficiency saving deductions, but they are a way to get up to 500 dollars back from the government.

In early December right in the middle of the cold snap that covered the country we had a furnace go out. Yep, Christmas shopping was curtailed as we had the lovely opportunity to spend nearly two thousand dollars, top market pricing, on a new furnace. It was painful, but we will end up getting a $150 credit on on 2013 taxes. That takes a little of the sting out of it. It would have been more painful now that I realize it if the furnace had gone out in January of this year. The credit has now expired.

Here are the things you need to know to get a tax credit if you replaced a furnace, air conditioning unit, or a water heater in 2013.

Heating, Cooling and Water-Heating Equipment

Taxpayers who purchase qualified residential energy-efficient property may eligible for a tax credit. The credit is equal to the full cost of the equipment up to the following caps:
Advanced main air circulating fan: $50
Natural gas, propane, or oil furnace or hot water boiler with an annual fuel utilization rate of 95 or greater: $150
Electric heat pump water heater with an energy factor of at least 2.0: $300
Electric heat pump which achieves the highest efficiency tier established by the Consortium for Energy Efficiency: $300
Central air conditioner which achieves the highest efficiency tier established by the Consortium for Energy Efficiency: $300
Natural gas, propane, or oil water heater which has either an energy factor of at least 0.82 or a thermal efficiency of at least 90 percent: $300
Biomass stoves that use “plant-derived fuel available on a renewable or recurring basis, including agricultural crops and trees, wood and wood waste and residues (including wood pellets), plants (including aquatic plants), grasses, residues, and fibers”: $300

IRS Form 5695 & Instructions: Residential Energy Credits