Inflation Reduction Act (IRA) of 2022
To help reduce the effects of inflation, the U.S. Government passed the Inflation Reduction Act of 2022. Of particular interest to homeowners, this act includes a number of tax credits for the installation of ENERGY STAR® certified home heating and cooling products. These include:
Tax Section 25C, Nonbusiness Energy Property Credit
Provides a tax credit to homeowners on qualified energy efficiency improvements through December 31, 2022. The credit is 10% of cost, up to $500.
* Effective January 31, 2023, provides a tax credit to homeowners equal to 30% of installation costs up to $1,200 ($2,000 for Heat Pump). Products must be in the highest efficiency CEE tier:
- Air Conditioners | Up to $600 tax credit
- Heat Pumps | Up to $2,000 tax credit
- Gas Furnaces and Boilers | Up to $600 tax credit
- Advanced Main Air Circulating Fan | Must use no more than 2% of furnace’s total energy, up to $50 tax credit
Tax Section 25D, Residential Energy Efficient Property
Provides a tax credit to homeowners equal to 30% of installation costs for ENERGY STAR® geothermal heat pumps until 2032. That percentage drops to 26% in 2033 and 22% in 2034.
High-Efficiency Electric Home Rebate Program
Provides income-depending rebates to eligible homeowners including:
- Up to $8,000 for all-electric Heat Pumps
- Up to $4,000 for electrical load service center
- Up to $2,500 for electric wiring
- Up to $14,000 maximum for all