The Inflation Reduction Act

The Inflation Reduction Act of 2022 includes tax credits that reward homeowners for purchasing certain high-efficiency HVAC equipment.

What is the Inflation Reduction Act?

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 several tax credits for the installation of ENERGY STAR® certified home heating and cooling products. These include:

Tax Section 25C, Nonbusiness Energy Property Credit

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.

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

Disclaimer: *All rebates, credits, and incentives are continually changing and Madison HVAC/R, LLC is not in control of or responsible for covering the difference in potential changes.*