To help reduce the effects of inflation, the U.S. Government has 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 Dec. 31, 2022. The credit is 10% of cost up to $500 or a specific amount from $50-$300.
|Maximum Tax Credit Available||Product Type||Minimum Efficiency Requirements|
|$50||Any advanced main air circulating fan||*See below|
|$150||Natural gas, propane, oil furnace or boiler||95% AFUE|
|$300||Split system air conditioner||16 SEER / 13 EER|
|$300||Split system heat pump||15 SEER / 12.5 EER / 8.5 HSPF|
|$300||Packaged air conditioner||14 SEER / 12 EER|
|$300||Packaged heat pump||14 SEER / 12 EER / 8 HSPF|
|$300||Packaged gas / electric||14 SEER / 12 EER|
*An advanced main air circulating fan is a fan used in a natural gas, propane or oil furnace and which has an annual electricity use of no more than 2% of the total annual energy use of the furnace.
- Effective Jan 1, 2023: Provides a tax credit to homeowners equal to 30% of installation costs for the highest efficiency tier products, up to a maximum of $600 for qualified air conditioners and furnaces, and a maximum of $2,000 for qualified heat pumps.
Tax Section 25D, Residential Energy Efficient Property
Provides a tax credit to homeowners equal to 30% of installation costs for ENERGY STAR® tier products 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