What Las Vegas Homeowners Should Know about Nevada’s Tax Credits and Rebates for AC Replacement

Replacing an air conditioner in Las Vegas is a major investment, and chances are good that you’re making it under pressure. What a lot of people don’t realize until after the fact is that money was available to offset that cost, and they left it on the table because nobody told them before they signed the contract.

The Federal Tax Credit

The Inflation Reduction Act expanded federal tax incentives for home upgrades like new central air conditioning systems. What you should be interested in is the Energy Efficient Home Improvement Credit, also called the 25C credit after its section of the tax code.

It currently covers:

• Central air conditioners: 30% of the installed cost, up to a $600 annual credit (minimum 16 SEER2 rating in the Southwest climate zone, which includes Nevada).
• Air-source heat pumps: 30% of the installed cost, up to $2,000 per year. Heat pumps qualify for more money because they also provide heating.

A few caveats:

• This is a nonrefundable tax credit, meaning it reduces your tax liability dollar-for-dollar but doesn’t give you a refund if the credit is more than what you owe.
• The $600 and $2,000 caps reset each tax year, so if you’re replacing multiple components over multiple years, you can claim the credit each time.
• The credit is for the installed cost (equipment plus labor), not just the equipment itself.

Remember that laws change regularly, so double-check that these still apply.

NV Energy Rebates

NV Energy offers rebates for qualifying high-efficiency HVAC equipment. Amounts and qualifying equipment change from time to time based on things like funding and utility priorities, so always check NV Energy’s rebate portal.

That said, heat pumps and high-SEER central AC systems almost always qualify, and rebates have been substantial enough to offset a lot of your equipment costs. Before any AC installation, check NV Energy’s current offerings or ask the installer/contractor what’s available at the time of your purchase.

Note that you can claim the federal credit on your tax return and get the utility rebate separately, and both can apply to the same installation.

What to Do to Make Sure You Get the Credits

Confirm efficiency ratings before purchase. The tax credit requires specific SEER2 ratings, and not every system qualifies. Ask your contractor whether your new equipment meets the threshold and get that in writing if possible. Then make sure to save the AHRI certificate for the equipment, which lists certified efficiency ratings.

Keep all the documentation. You’ll need the manufacturer’s certification statement, your receipt showing the installed cost, and in some cases the AHRI certificate when you file. Your contractor should give you all of this.

Next, start filing. You’ll need to file IRS Form 5695 and apply for utility rebates. NV Energy rebates usually have a 90-day application window, so don’t wait.

Is It Time to Replace Your AC System?

The combination of federal credits and utility rebates makes this a great time to replace aging AC equipment. If your system is aging and you’ve been putting off a replacement because of costs, there are ways to save.