Tax Credit Guides

Federal 25C Tax Credit: How to Claim

UniColorado Heating & Cooling is pleased to share the benefits of the 25C tax credit under the Inflation Reduction Act with our customers. This credit is a great opportunity for our customers who are considering investing in energy-efficient heating and cooling systems.

Eligibility Criteria for UniColorado customers:

All systems that had the “Eligible for Federal 25C Tax credit” included in the estimate or invoice. Please use final invoiced amount. Max credit is $2,000 for this measure.
Electrical panel upgrades that were part of a heat pump project that was eligible for the Federal 25C Tax credit. Please use final invoiced amount. Max credit is $600 for this measure.
If your installation included a Denver heat pump rebate, please input the invoice amount after the Denver Heat Pump Rebate has been applied as stated on your final invoice.

Important Highlights of the Federal 25C Tax Credit:

Tax Credit Details: You can benefit from a 30% tax credit on the total purchase of eligible air source heat pumps and heat pump water heaters capped at $2,000. Additional upgrades are capped at $1,200. For example, Electrical panel upgrades installed in conjunction with a heat pump or HPWH will be eligible for a tax credit of up to $600.
Installation Deadline: To be eligible for the tax credit for a given tax year, your installation of a heat pump HVAC system or heat pump water heater needs to be completed within that year. To claim the credit in the 2023 tax year, your installation should be completed before December 31, 2023. This credit is available annually, allowing you to benefit from it each year.
Property Eligibility: The equipment must be installed in your primary residence, an existing home in the United States. This includes houses, duplexes, townhomes and more. New constructions and rental properties are not eligible.
Example of Tax Credit Benefit: If your federal tax liability is $4,000 and you qualify for a maximum $2,000 credit, your tax payable would be reduced to $2,000, providing a substantial financial benefit

Read the IRS’s release on the Federal tax credit here.

Disclaimer: Please consult a tax professional for advice on your individual tax situation. We are not responsible for any specific tax issues that may arise from our simplified guide.

Updated April 17, 2024
By: Editorial Staff

Required Form Instructions

IRS Form 5695: Download & complete IRS Form 5695. Focus on Part Two: Energy Efficient Home Improvement Credit. This section is designed for the heat pump tax credit.
- Fill in your personal details, including Name, Social Security Number, and the address of your primary residence.
- PART I covers the Residential Clean Energy Credit.
- PART II is where you’ll detail your Energy Efficient Home Improvement Credit where you should continue with lines 17 through 32.
  - In Section A Line 18, enter the total invoice amount for insulation and air sealing if you had this service completed.
  - In Section B Line 25ab, enter the total invoice amount for electrical panel upgrades if you had this service completed.
  - In Section B Line 29abc, enter the total invoice amount for heat pumps and/or heat pump water heaters if you had this service completed.
Integrating with Form 1040: When you file your taxes, include the calculated tax credit information in your standard Form 1040 or consult your tax professional.
Filing: Make sure to attach Form 5695 with your tax filing to accurately claim the heat pump tax credit.

For more comprehensive guidance on filling out the form, please read the IRS’s Official Guide Here. If you require further information, you can use the form below to reach us.

UniColorado Heating & Cooling thanks you for being a valued customer. Your support is pivotal to our success, and in return, we are committed to assisting you before, during, and after your Climate-Friendly Home Upgrade.

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Federal 25C Tax Credit: How to Claim

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