Ductless mini-splits have a lot to offer anyone in the market for a new HVAC system. They’re easy to install just about anywhere. They’re ridiculously energy-efficient. They can be customized to match your family’s unique climate control needs.
Oh, and did we mention they can save you a bundle of money courtesy of federal tax credits? This can be a bit complicated as taxes usually are so let’s dig into the details to see how you can claim maximum savings.
Saving Money in More Ways Than One
We don’t need to tell you that energy prices are skyrocketing here in Central Florida. With even higher rates on the horizon, investing in a ductless mini-split makes more sense than ever. Unlike ordinary air conditioners, mini-splits don’t need to pump air through leaky, poorly insulated ductwork or condition the entire house at once. That means they use less energy to keep you comfortable, locking in lower utility bills for years to come.
If you suspect there’s a catch coming, you’re right. Ductless mini-splits usually cost more upfront than conventional air conditioners, which is enough to turn some people away. The higher price can be easily offset through future energy savings, but who has that kind of patience? To make high-efficiency HVAC equipment more appealing here and now, the federal government has an offer that’s too good to pass up.
The Energy Efficient Home Improvement Tax Credit
At least in theory, the 25C Energy Efficient Home Improvement Credit does just what it says on the tin. When you make certain energy-saving home improvements, you can claim part of the cost on your federal income taxes. This includes upgrading outdated and inefficient HVAC equipment. Although the program covers most types of systems, the biggest potential payoff comes from heat pumps and mini-splits. Installing a qualifying ductless mini-split can net you a deduction equaling 30% of the unit’s total cost, up to a maximum of $2,000.
Sounds simple, right? Not so fast! The devil is in the details, and this valuable tax credit comes with plenty of strings attached. Before you rush out and buy all-new heating and cooling equipment, let’s break down the requirements you need to meet to take full advantage of the available incentives.
The Fine Print: Are You Eligible for a Tax Credit?
So, who actually qualifies for the Energy Efficient Home Improvement Credit? First, the good news. As long as you’re installing a mini-split in a property you occupy yourself — even if it’s a vacation home — you’re probably eligible. This covers all sorts of residences, from houses and mobile homes to condos and duplexes. As of 2025, even renters who pay for improvements can claim tax breaks in most situations.
The bad news? If you own a property exclusively used as a rental, you’re out of luck. Likewise, you won’t be able to deduct any expenses for installations that are part of new construction projects. Only improvements made to existing personal residences can be used to apply for this particular tax credit.
Speaking of which, it’s important to note that the 25C home improvement credit is not the same as a rebate. While rebate programs typically offer cash back after installation, nonrefundable tax credits provide deductions on your yearly income taxes. As such, you can only claim as much money as you owe to the IRS. When in doubt, it’s always best to consult a tax professional. In general, however, you should be able to claim a deduction if:
- You’re installing a mini-split in your personal residence
- The installation isn’t part of any new construction
- Your chosen equipment meets eligibility requirements
- You have income taxes due for the year you’re filing
How To Claim a Ductless Mini-Split Tax Deduction
As with most things tax-related, claiming a deduction for your new mini-split can be a hassle. To make things easier, be sure to choose a reputable, experienced HVAC contractor who can help you navigate the process. While the details may change depending on your situation, there are three basic steps you’ll need to complete to claim this tax credit:
Install a Qualifying Mini-Split
Alas, you can’t just buy any old HVAC system and write it off on your taxes. In fact, you’ll have to be quite picky indeed if you want to earn a hefty deduction. Only systems recognized as ENERGY STAR Most Efficient are eligible, which means your mini-split will have to hit some rather impressive efficiency benchmarks. Current standards for ductless systems include:
- 16.0 SEER2
- 11.0 EER2
- 8.0 HSPF2
In addition, the IRS now only accepts products from so-called “qualified manufacturers.” Most of the industry’s top brands are already registered, so this shouldn’t be a problem. Currently, all you need is the four-digit QM code corresponding to your mini-split’s manufacturer. In the future, however, you’ll also need a specific PIN number for each individual product.
Collect the Proper Documentation
We all knew it was coming, right? After all, taxes and paperwork go together like peanut butter and jelly. The IRS can be a real stickler for detail, so be sure to practice good record-keeping throughout the installation process. Document as much as you can and work with your contractor to gather up any papers that might be useful come tax time, including:
- Receipts for products and equipment
- Installation records and invoices
- Manufacturer certification statements
File Your Federal Tax Return
Once tax season rolls around, it’s time to file your return and see how much you’ve saved. If you work with a tax preparer, you can simply hand over your supporting documentation and let them do the rest. More of a do-it-yourselfer? Fill out IRS Form 5695: Residential Energy Credits to calculate the appropriate deduction and apply it to your tax bill.
Feeling a little overwhelmed by the whole process? You’re not alone, but your local HVAC experts can help you cut through the red tape. Call One Hour Air Conditioning & Heating today to install an efficient, high-quality ductless mini-split and earn the tax credits you deserve.
