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