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Federal Tax Credits

The Inflation Reduction Act

The Inflation Reduction Act of 2022 included tax credits that rewarded homeowners for purchasing certain high-efficiency HVAC equipment through December 31, 2025.

the-inflation-reduction-act-of-2022

What is the Inflation Reduction Act?

To help reduce the effects of inflation, the U.S. Government passed the Inflation Reduction Act of 2022. Of particular interest to homeowners, this act included a number of tax credits for the installation of ENERGY STAR® certified home heating and cooling products purchased through December 31, 2025. These included:

Tax Section 25C, Nonbusiness Energy Property Credit

Effective Jan 1, 2023 through December 31, 2025: 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.

25C Tax Credit
Product
Offering
Region
SEER2
EER2
HSPF2
COP @ 5F
Capacity Ratio (5F/47F)
Other Requirements
Up to $2,000
Heat Pumps
Split Ducted Heat Pump
Path A
≥16.0
≥9.8
≥8.5
1.75
60%
-
Up to $2,000
Heat Pumps
Split Ducted Heat Pump
Path B
≥16.0
≥11.0
≥8.0
1.75
45%
-
Up to $2,000
Heat Pumps
Packaged Heat Pump
-
≥15.2
≥10
≥7.2
1.75
45%
Up to $600
Air Conditioners
Split AC
-
≥17.0
≥12
-
-
-
-
Up to $600
Air Conditioners
Packaged AC
-
≥16.0
≥11.5
-
-
-
-
Up to $600
Furnaces
Gas-Fired Forced Hot Air
-
-
-
-
-
-
≥97% AFUE


See tax credits for 2022 and previous years

Tax Section 25D, Residential Energy Efficient Property

Provides a tax credit to homeowners equal to 30% of installation costs for ENERGY STAR® tier products purchased through December 31, 2025.