Property owners and HVAC professionals should be aware of the tax incentives available from the U.S. government for specific heating, ventilation, and air conditioning installations, improvements, or updates. In this article, we will provide an overview of some common types of these applicable tax incentives to ensure that all parties understand their options when making decisions regarding any necessary upgrades related to HVAC systems.
Through the Inflation Reduction Act of 2022 and the Residential Clean Energy credit, the federal government is incentivizing Americans to make their homes and buildings more energy-efficient. Not only does this help reduce energy costs, but it also allows for a smoother transition towards cleaner energy sources by decreasing demand for fossil fuels.
The ENERGY STAR Federal Tax Credit program provides tax credits for energy-efficient home improvements, such as HVAC systems. These credits can be used for qualifying split systems, packaged systems, air conditioners, heat pumps, and zero-energy-ready homes. Depending on the type of improvement, tax credits may range from 30 percent to $5,000. This program encourages property owners and homebuilders to make energy-efficient upgrades.
To determine whether a new system qualifies for “high efficiency” tax credits, it’s recommended to consult an HVAC installer before purchase and installation. Heat pumps, central AC units, water heaters, and furnaces may all be eligible for such benefits when placed into service in a primary residence by the end of the year. To keep up with the latest qualifications, consult the IRS website regarding newly constructed homes and their eligibility.
Interested in unlocking the potential of tax credits for your HVAC system? Read on to find out exactly what qualifies.