Are There Tax Credits for New Air Conditioners in New Jersey?

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Purchasing a new air conditioner system can make your home a much more comfortable place to be. However, many homeowners have concerns about paying for air conditioners, especially when the economy is tough. Some even ask, "Are there tax credits for new air conditioners?"

In particular, skyrocketing inflation has made it hard for many families to afford new air conditioners. While these modern systems save a lot of money over time, purchasing and installing them can be expensive, especially when you have so many other budget concerns. 

Fortunately, the state of New Jersey and the federal government offers various tax credits and programs designed to help homeowners make their homes more energy-efficient. This article explores these benefits and how to use them.

When you rely on expert air conditioning replacement in Hillsdale, NJ, you'll be able to take advantage of these state and federal tax credits.

New Jersey's Clean Energy Program

New Jersey's Clean Energy Program (NJCEP) provides homeowners with tax credits for investing in clean, effective air conditioning systems. It offers residential programs that incentivize energy efficiency and pollution reduction. It's designed to help offset the costs associated with obtaining and installing a new air conditioner.

The NJCEP features benefits like the WARM Advantage program, an initiative specifically designed to support air conditioners for existing homes. If you live in New Jersey and replace your home's old AC system with a new, efficient alternative, you can use this program on your tax returns.

However, if you're building a new home, you can still benefit from the NJCEP. The Home Performance program helps prospective homeowners find "whole house" solutions for optimizing energy efficiency and reducing pollution. Contact your local AC professionals to see if your construction project could benefit from this program.

Comfort Partners

Many homeowners ask, "Are there tax credits for new air conditioners?" Unfortunately, upgrading home air conditioning systems can be cost-prohibitive for many. Thankfully, the New Jersey Comfort Partners program helps income-eligible families install new, energy-efficient air conditioning systems in their homes.

Eligibility for the Comfort Partners program depends on your yearly income and how many people are in your household. Generally, the requirement is that your income has to be at or below 250% of the Federal Poverty Guidelines.

ENERGY STAR® Rebate Finder

Are you interested in maximizing your savings when installing a new air conditioner? Check out the ENERGY STAR® Rebate Finder!

ENERGY STAR® provides rebates, promotional discounts, and other financial rewards for countless residential and commercial air conditioning products. They offer over 40 different rewards on products from $50 to $2000. Unlike other benefits, these are not tax credits but actual rebates.

Rebate eligibility depends on your geographic location. Simply put your home or business ZIP code into the Rebate Finder and see what works for you!

Federal Tax Credits

Are you interested in federal tax credits for your New Jersey home air conditioning system? You should know that the federal government does offer a variety of tax credits for citizens interested in new air conditioners.

Due to serious economic troubles and sky-high inflation rates, Congress passed the Inflation Reduction Act of 2022. While this act includes numerous provisions intended to help Americans deal with record levels of inflation, you'll be pleased to hear that it contains several provisions for homeowners interested in new air conditioning systems.

Nonbusiness Energy Property Credit

Homeowners interested in high-efficiency air conditioners can take advantage of this program. It provides a tax credit of up to $600 for qualified, eligible air conditioners.

The rate doesn't vary, regardless of whether you're interested in packaged or split systems. However, packaged and split systems have different SEER2 and EER2 requirements in order to be eligible.

There are also tax credits for heat pumps and furnaces, with eligible heat pumps providing a credit of up to $2,000. However, these heat pump credits are region-specific and depend on whether you want a split-ducted, non-ducted, or packaged heat pump.

ENERGY STAR® Tax Credits

If you want to install a new, high-efficiency AC system for your New Jersey home, you could be eligible for other federal tax credits. While these credits aren't always associated with the 2022 Inflation Reduction Act, they provide homeowners with considerable financial reimbursement for the cost of installing new ENERGY STAR®-rated products.

Central air conditioning units are among the products eligible for these energy property tax credits. You can receive a credit of 10% of the cost or a flat-rate credit of $50 to $300. The percentage-dependent tax credit can reach a maximum value of $500.

Work with your local air conditioning contractors to find an eligible system, determining how much money you can save on installation and purchasing costs. Not only will you get part of your money back, but you'll also save money over time by using a more energy-efficient cooling system. 

Choosing the Right Tax Credit Program

You are probably curious about which program works best for your needs after hearing about the different options available. Choosing the right tax credit or rebate program depends on your circumstances. 

For example, if you already own a home or business but want to upgrade your pre-existing air conditioning system, combining the NJCEP's WARMAdvantage with the Energy Star Rebate or Credit program might be your best bet. However, the Home Performance program combined with a federal nonbusiness energy tax credit works best for prospective homeowners. 

Quality Air Conditioning Services in Hillsdale, NJ

Are you still asking, "Are there tax credits for new air conditioners in New Jersey?" our Gladiator Services team has you covered! We know how replacing AC without replacing a furnace works.

We're familiar with both New Jersey and federal tax credit programs and can work with you to develop a cost-effective plan for your air conditioning needs. Call our Gladiator Services experts at (201) 571-1715 to speak to one of our team members and learn more about our services.