Getting paid to make your home more energy efficient? At first this sounds like something “too good to be true” but, thanks to the Inflation Reduction Act that was signed into law August 16th, 2022, you can receive tax credits when choosing to tackle projects that improve your home’s energy efficiency. The Inflation Reduction Act is a large bill that is designed to limit inflation and includes legislation on a wide range of topics. One of the most important parts of the bill will provide homeowners clean energy tax credits and other relevant incentives that will help with the high costs of green upgrades to their home. If you are planning on replacing your doors and windows, installing a new hot water heater, or replacing your homes heating and cooling system, you will want to investigate if you are entitled to tax credits as part of this $740 billion legislation.
The biggest energy hog in your home is your heating and cooling system, so it is not a surprise that incentives have been put in place to help homeowners purchase more efficient heating and cooling equipment. The Inflation Reduction Act gives homeowners access to a tax credit worth 30% of installed costs with a maximum of $1,200 for a furnace and AC combo and $2,000 for a furnace and heat pump combo. This tax credit is only available on qualifying equipment so make sure to check with your contractor to see if your new system will qualify.
Here at Comfortmate we use American Standard equipment for our system replacements. All American Standard heat pumps and air conditioners that have a SEER rating between 14-20 qualify for the tax credit. All American Standard furnaces with an AFUE (annual fuel utilization efficiency) of 95% or greater will also qualify for the program giving customers a lot of options to choose from.
Some ductless heating and cooling equipment also will qualify. Since ductless systems are heat pumps homeowners that have ductless equipment installed in their home in 2023 can also take advantage of the tax credit up to $2,000! Ductless systems provide both heating and cooling powered only by electric. Some ductless systems are twice the efficiency of your average central AC and are great solutions for hot and cold bedrooms, offices, basements, garages, additions, bonus rooms, and more!
This post is for informational purposes only. We strongly encourage every customer to seek the advice of a certified tax professional to confirm they meet all requirements set forth in the Inflation Reduction Act amended section 25C. Replacing your homes comfort equipment can be a very big expense.