Energy Efficiency Tax Credits

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

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. Consult your tax advisor for confirmation of tax credit amounts and eligibility.

2023 High-Efficiency Electric Home Rebate Program (HEEHRA) Heat Pump Rebate

Additionally, the updated IRA includes an exciting new rebate program known as HEEHRA (High-Efficiency Electric Home Rebate Act) aimed at providing instant savings to homeowners looking to purchase energy-efficient upgrades for their homes. HEEHRA will help American families save money on their monthly energy bills, create healthier indoor air environments, and reduce carbon emissions. The HEEHRA rebate provides up to $14,000 to cover various costs to electrify homes in low-income and moderate-income households. Ready for even more great news? HEEHRA can stack with federal energy efficiency and electrification tax credits! That means you can receive the HEEHRA rebate and still take advantage of claiming the IRA tax credit.

Provides income-based 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

2023 HEEHRA Program Requirements

• If your household income is less than 80% of your area’s median income, you’re eligible to receive the maximum rebate of $8,000 for a new heat pump.
• If your household income is 81-150% of your area’s median income, you’re eligible to receive up to 50% of the maximum heat pump rebate.
• If your household income exceeds 150% of your area’s median income you aren’t eligible for the HEEHRA rebates but can still receive a 30% tax credit of up to $2,000 on a new heat pump.

You can look up your Area Median Income using this AMLI Lookup Tool.