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This is a tax question in relation to the federal inflation,

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reduction act and tax credits...

This is a tax question in relation to the federal inflation, reduction act and tax credits and or Rebates on my 2022 income tax returns. The new federal inflation, reduction act includes tax credits for installation of heat pumps that are installed effective January 1, 2023 and beyond I did just have a new heat pump. The whole system installed on January 3, 2023. Unfortunately I didn’t understand the whole program and it appears I may not have a high enough Seer rating on my heat pump to qualify for the Rebates but I am not sure in my research is taking me all over and I don’t know if I have the right answer. So my heat pump system is a 15 seer/13 ever.So my question is, does this qualify for the federal tax credit end or rebate through the inflation, reduction act. And to if that’s the case I want to know if for tax liability purposes can I claim this on my individual tax return in my living situation. Which is me and my partner of 14 years reside together however, the house is fully in my name . We both submit our taxes individually. If I qualify for the tax credit on my heat pump with the seer rating that I have, is it feasible or legal for me just to apply for these tax credits based on my sole income and not my partners when I submit my individual taxes. My partner pays half my mortgage every month.Thank you so much that I did not put this in the most most succinct or straightforward way, so if you have any questions about my questions, please get back to me. Thank you so much, Michelle.

Submitted: 2 months ago.Category: Tax

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3/18/2023

Tax Professional: Lev, Tax Advisor replied 2 months ago

Lev, Tax Advisor

Category: Tax

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Tax Professional: Lev, Tax Advisor replied 2 months ago

Dear *****,

What products are eligible for tax credits?

Heating, cooling, and water heating

Electric or natural gas heat pumps; electric or natural gas heat pump water heaters; central air conditioners; natural gas or propane or oil water heaters; natural gas or propane or oil furnaces or hot water boilers that meet or exceed the specific efficiency tiers established by the Consortium for Energy Efficiency.

Central Air Conditioning and Air-Source Heat Pumps - new specification just revised for 2023 is attached

SEER2 must be above 15.2 to qualify.

Only the property owner may claim the credit regardless of how improvements are financed.

My goal is to provide you with excellent service. If you have any further questions, please don't hesitate to ask - I am happy to help further!

Customer reply replied 2 months ago

OK, so you answer the question about the seer rating it must be above or at 15 or above 15.2 I will double check with my HVAC installer to see if it’s actually 15.2 so with that said if it is 15.2 how do I go about claiming this when I submit my tax returns for 2022? Do you have some direction for me? Thank you.

Tax Professional: Lev, Tax Advisor replied 2 months ago

Dear Customer,

If the installation is completed in 2023 - the credit may be only claimed on your 2023 tax. It may not be claimed on your 2022 tax return. Sorry if you expected differently.

Simply reply if you require additional information, and I will be happy to help with any follow-up questions.

Customer reply replied 2 months ago

Oh. OK, thank you I did not realize I would have to submit those next year on my 2023 taxes. Now that you say that that does appear to make sense the financial transaction occurred in 2023 so of course I would not be able to claim it on my 2022 taxes. Thank you for pointing that out.One thing I’m not sure about in your prior answer is OK so I’m determining now if my heat pump unit is actually 15.2 and not just 15 but that being said if it turns out to be 15.2 when I go ahead and do this on my taxes when I submit next year for my 2023 taxes what am I supposed to know about actually filling out the tax forms themselves like is there a special form? What do I need to know about actually submitting this on my 2023 taxes?

Tax Professional: Lev, Tax Advisor replied 2 months ago

Dear Customer,

The credit is claimed on Form 5695

https://www.irs.gov/pub/irs-pdf/f5695.pdf

which is included in your tax return. If the unit is qualified for the credit - the seller or installer should provide a certificate of whether the unit is qualified for the credit. You may rely on that certificate.

The IRS has not yet released the updated form and instructions for 2023. These will be available in the coming December.

Simply reply if you require additional information, and I will be happy to help with any follow-up questions.

Customer reply replied 2 months ago

OK. Thank you so much. That is all for now. This has been very helpful. Appreciate your time. Take care, Michelle.

Tax Professional: Lev, Tax Advisor replied 2 months ago

I hope I’ve provided the information you were seeking. If you need more help, please let me know so l can continue to assist you.

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