Federal 25C Tax Credit: How to Claim

UniColorado Heating & Cooling is pleased to inform our customers about the benefits of the Federal 25C Tax Credit under the Inflation Reduction Act. This is a great opportunity for those considering investing in energy-efficient heating and cooling systems.

Eligibility Criteria for UniColorado Customers:

• Heat Pumps and Water Heaters: If your estimate or invoice includes “Eligible for Federal 25C Tax credit,” you can claim a credit of 30% of the invoiced amount, up to a maximum of $2,000.
• Electrical Panel Upgrades: If you upgraded your electrical panel as part of an eligible heat pump project, you can claim 30% of the invoiced amount, up to a maximum of $600.
• Denver Heat Pump Rebate: If you received this rebate, use the invoice amount after the rebate has been applied when calculating your credit.

Important Highlights of the Federal 25C Tax Credit:

1. Tax Credit Amount: You can claim a 30% tax credit on eligible purchases:
   • Up to $2,000 for heat pumps and heat pump water heaters.
   • Up to $1,200 for other upgrades, including a maximum of $600 for electrical panel upgrades associated with heat pump installations.
2. Installation Deadline: Installations must be completed within the tax year you are claiming. For the 2023 tax year, complete your installation by December 31, 2023. This credit is available annually.
3. Property Eligibility: The equipment must be installed in your primary residence (existing homes only) in the United States. Rentals and new constructions do not qualify.
4. Tax Credit Example: If your federal tax liability is $4,000 and you qualify for a $2,000 credit, your tax owed reduces to $2,000.

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.