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
| 25C Tax Credit | Product | Offering | Region | SEER2 | EER2 | HSPF2 | COP @ 5F | Capacity Ratio (17F/47F) | Capacity Ratio (5F/47F) | Other Requirements |
|---|---|---|---|---|---|---|---|---|---|---|
| Up to $2,000 | Heat Pumps | Split Ducted Heat Pump | North | ≥15.2 | ≥10 | ≥8.1 | 1.75 | 58% | 70% | Choice of capacity ratio |
| South | ≥15.2 | ≥11.7 | ≥7.8 | - | - | - | - | |||
| Non-Ducted Heat Pump | North | ≥16 | ≥9 | ≥9.5 | 1.75 | 58% | 70% | Choice of capacity ratio | ||
| South | ≥16 | ≥12 | ≥9 | - | - | - | - | |||
| Packaged Heat Pump | North | ≥15.2 | ≥10 | ≥8.1 | 1.75 | 58% | 70% | Choice of capacity ratio | ||
| South | ≥15.2 | ≥10.6 | ≥7.2 | - | - | - | - | |||
| Up to $600 | Air Conditioners | Split AC | Nationally | ≥16 | ≥12 | - | - | - | - | - |
| Packaged AC | Nationally | ≥15.2 | ≥11.5 | - | - | - | - | - | ||
| Up to $600 | Furnaces | Gas-Fired Forced Hot Air | Nationally | - | - | - | - | - | - | ≥97% AFUE |
Subject to change: While the 2023 benefits of Section 25C are known for the 2023 tax year and beyond, the criteria to qualify for credit(s) are not yet finalized by the IRS and the above is subject to change based on whether the IRS will adopt the full CEE Criteria.
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
