As you probably know, in a last minute compromise on New Years Day 2013, Congress passed an agreement that will put off mandated cuts in federal spending and reinstate dozens of popular tax breaks that benefit individuals. Please note that among the renewed and retroactive tax breaks was the reinstatement of the $500 25C tax credit for installing qualified energy efficient improvements, like a high efficiency furnace, central air conditioner, heat pump, hot water heater, or other measures. This was extended retroactively for 2012 and through 2013. This means that on top of any utility rebates consumers may have received or be receiving, they will also be able to claim up to a $500 Federal Tax Credit on your previously installed system.  A qualifying furnace or hot water boiler is eligible for up to $150 in tax credits, and a qualified central air conditioner, heat pump, or hot water heater is eligible for up to $300 in tax credits.
Please advise customers, accountants and/or tax preparers when putting together 2012 1040 forms. Homeowners can claim qualifying 25C energy tax credits on IRS Form 5695.
For a summary of the final tax deal:
IRS Form 5695:
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