If you’ve recently upgraded your heating or cooling system, you may be asking: do I need to file IRS Form 5695 for every HVAC project? The answer depends on whether your upgrade qualifies for a federal energy efficiency tax credit.
In 2025, HVAC tax credits can save you hundreds—or even thousands—of dollars. But the IRS requires clear documentation, and mistakes can lead to missed savings. In this guide, I’ll explain when Form 5695 is required, what upgrades count, and common errors homeowners make when filing.
What Is IRS Form 5695?
IRS Form 5695, officially called Residential Energy Credits, is used to claim federal tax credits for energy efficiency improvements and renewable energy projects.
The form covers two main categories:
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Residential Clean Energy Credits – solar, wind, geothermal, fuel cells.
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Energy Efficient Home Improvement Credits – HVAC systems, insulation, windows, doors, and energy audits.
According to the IRS Form 5695 instructions, the form must be submitted with your annual tax return if you’re claiming a credit. Without it, you won’t get the savings you’re entitled to.
When You Need to File IRS Form 5695 for HVAC Upgrades
You must file Form 5695 any time you want to claim a federal HVAC tax credit. These credits apply only to qualifying high-efficiency systems installed in your primary residence.
Examples of Eligible HVAC Upgrades in 2025:
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Heat pumps: Up to $2,000 credit.
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Central air conditioners: Up to $600 credit.
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High-efficiency furnaces or boilers: Up to $600 credit.
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Home energy audits: $150 credit if performed by a certified professional.
The ENERGY STAR heating and cooling standards outline the minimum SEER2, HSPF2, and AFUE ratings equipment must meet to qualify. If your new system meets these thresholds, you’ll need to file Form 5695 to claim your credit.
When You Don’t Need to File Form 5695
Not every HVAC project involves the IRS. You do not need to file if:
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You completed a repair (e.g., replacing a capacitor, motor, or compressor).
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You replaced a single component (e.g., coil, ductwork, or blower).
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You’re only claiming utility or manufacturer rebates (those are filed with the provider, not the IRS).
The U.S. Department of Energy’s Energy Saver confirms that only efficiency upgrades that improve long-term energy performance are eligible for credits. Repairs and minor replacements don’t count.
Filing Rules for Multiple HVAC Upgrades
Multiple Upgrades in the Same Year
If you installed more than one qualifying system in 2025—say a heat pump and a high-efficiency furnace—you only need to file one Form 5695. The form allows you to report multiple improvements together.
Upgrades Across Different Years
If you upgrade in 2025 and again in 2026, you must file a new Form 5695 each year you’re claiming a credit. Credits reset annually under the Inflation Reduction Act.
The Tax Policy Center notes that credits apply to the tax year in which the system was “placed in service.” That means the system must be installed and operational during that year—not just purchased.
Common Mistakes to Avoid When Filing IRS Form 5695
Many homeowners miss out on credits simply because of paperwork errors. Here are the top mistakes to watch for:
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Filing for non-qualifying repairs. The IRS won’t grant credits for fixes that don’t meet efficiency standards.
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Incorrect efficiency ratings. Be sure to use the system’s AHRI-certified ratings, not just marketing claims.
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Missing certification statements. The IRS requires a manufacturer’s certification statement confirming eligibility.
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Lack of documentation. Always keep itemized invoices from your contractor.
The National Renewable Energy Laboratory (NREL) stresses that documentation is critical—without it, your credit may be denied or delayed.
Alternatives to Tax Credits That Don’t Require IRS Form 5695
If your project doesn’t qualify for a federal tax credit, you may still save money through other incentives that don’t require IRS paperwork:
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Utility rebates: Often for smart thermostats, duct sealing, or seasonal promotions.
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State-level incentives: Programs vary widely by location—check the DSIRE database for updated listings.
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Manufacturer promotions: Some brands offer seasonal discounts or cash-back offers independent of tax credits.
These savings may not require extra tax filing but can still offset project costs significantly.
Final Thoughts
You don’t need to file IRS Form 5695 for every HVAC project—but you do need it for qualifying efficiency upgrades like heat pumps, high-efficiency ACs, and furnaces. For repairs and minor replacements, look instead to rebates and manufacturer promotions.
The bottom line: If you’re planning a major HVAC upgrade in 2025, confirm efficiency ratings, save your paperwork, and be prepared to file Form 5695 with your tax return. That’s the only way to secure your federal credit.
📘 For the complete breakdown of incentives, visit 2025 HVAC Tax Credits & Rebates Explained
👉 Next in this series: What Qualifies for a 2025 HVAC Tax Credit? A Homeowner’s Checklist
Alex Lane
Your Home Comfort Advocate
