Tax Credits
Tax Credits | HVAC Unit Replacement | Heating and Air Conditioning | Delano
Ready to cash in on federal tax incentives while upgrading your comfort in Delano? HEP’s team turns paperwork into payback, guiding you through every rebate and credit tied to an eligible HVAC unit replacement. From high-efficiency heat pumps to smart, variable-speed air conditioners, we install equipment that meets the latest ENERGY STAR® and Inflation Reduction Act standards—so you can trim your energy bills today and slice next April’s tax bill, too.
Our local technicians handle the load calculations, permits, and registration while you enjoy quieter operation, balanced temperatures, and year-round peace of mind. Whether you’re swapping an aging furnace or ditching an unreliable A/C, HEP delivers transparent pricing, fast scheduling, and the expertise you need to make your Delano home healthier, greener, and more valuable—without leaving a dime of incentive on the table.
FAQs
What federal tax credits are available for replacing my HVAC system in Delano?
Homeowners in Delano can claim the Federal Energy Efficient Home Improvement Credit (Internal Revenue Code §25C). For tax years 2023-2032 the credit covers 30 % of the installed cost—up to $600 for a qualified high-efficiency air-conditioner or gas furnace and up to $2,000 for a heat pump, heat-pump water heater, or packaged geothermal unit. The credit applies to principal residences only, including single-family homes, condos, and manufactured homes that meet ENERGY STAR® requirements.
How much can I save with the Inflation Reduction Act 25C credit when I install a new HVAC unit?
Because the 25C credit is capped yearly, your savings depend on the equipment type and final invoice total. Example: a $9,000 cold-climate heat pump installation would yield the maximum $2,000 credit (30 % × $9,000 = $2,700 but limited to $2,000). A $4,500 16-SEER2 central air conditioner would qualify for $1,350, but the statute limits A/C and furnaces to $600 each, so you would receive $600. Labor, electrical upgrades, refrigerant lines, permits, and sales tax may all be included in the “installed cost” when calculating 30 %.
Do heat pumps and high-efficiency air conditioners both qualify for tax incentives in California?
Yes. At the federal level, qualifying equipment must meet the Consortium for Energy Efficiency (CEE) Tier 2 efficiency tiers. For split heat pumps that means ≥15.2 SEER2 and ≥7.8 HSPF2. For split central A/Cs the requirement is ≥16 SEER2. California’s statewide TECH Clean California program offers additional point-of-sale rebates—up to $1,000 per ton for heat pumps—while Southern California Edison customers may receive extra bill credits. These state/utility incentives can be combined with the federal tax credit and any local rebates offered by the City of Delano or Kern County.
What documentation do I need to claim a tax credit for my new HVAC unit on my federal return?
1. Manufacturer’s Certification Statement showing the model meets CEE Tier 2. 2. Paid invoice or contract listing model numbers, serial numbers, and itemized labor & material costs. 3. IRS Form 5695, Residential Energy Credits. Complete Part II for the Energy Efficient Home Improvement Credit and transfer the credit amount to Schedule 3, line 5 of Form 1040. 4. Keep all paperwork—including AHRI certificates—for at least 3 years. You do not mail the certificates with your return, but the IRS can request proof during an audit.
When should I have my new system installed to qualify, and can I claim the credit more than once?
The credit is based on the year the installation is placed in service, not when you sign the contract. As long as the equipment is operating in your home before December 31 of the tax year, you may claim the credit. The 25C credit resets every calendar year through 2032, so you can claim up to the annual limits each year you make qualifying improvements. For example, you could replace your air conditioner in 2024 and install a heat pump water heater in 2025, claiming credits in both years.
Are there any additional rebates or incentives in Delano or Kern County that can be combined with federal tax credits?
Yes. The San Joaquin Valley Air Pollution Control District’s “Clean Heating & Cooling Grant” offers up to $4,000 for heat-pump conversions that replace natural-gas appliances. Kern County residents may also qualify for the “Replace-It” program, providing $200–$500 for high-efficiency HVAC upgrades. Utility-specific incentives from PG&E, Southern California Edison, and SoCalGas frequently range from $200 to $800 per system. All of these can be stacked with the federal tax credit, but you must deduct any rebates that reduce your out-of-pocket cost before calculating the 30 % credit amount.