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Federal Tax Credits

Federal Tax Credits

How the Inflation Reduction Act Can Help Lower Your Costs

The Inflation Reduction Act is a program focused on reducing energy costs for homeowners. It includes various tax credits that go towards the installation of energy-efficient certified home heating & cooling products. The goal of the program is to encourage homeowners to upgrade to a more energy-efficient home HVAC system - however, how you qualify can get complicated. The experts at Benson's Heating & Air Conditioning are happy to help. Our guidance will make it easy for you to understand what credits and rebates are available so that you can get your money back quickly and easily. Read on to learn more!

Federal Tax Credits For Air Conditioners And Heat Pumps

What Systems Are Eligible For the Tax Credits?

For qualified energy-efficient home improvements, you may be eligible for federal tax credits worth up to $3,200 annually, or up 30% of the cost.

The following items and upgrades are acceptable (as long as they meet certain requirements):

  • Heat Pumps Using Air Sources
  • Air Conditioning Systems
  • Furnaces
  • Water Heaters Using A Heat Pump
  • Insulation
  • Windows and Doors
  • Upgrades to Electrical Panels
  • Home Energy Audits

Curious if you may qualify for a tax credit? Connect with the pros at Benson's to find out.

Limitations on Yearly Aggregates

Aggregate limits apply to the annual cap of $3,200.  Any combination of enhancements to a biomass stove or boiler, an air source heat pump, or a heat pump water heater may not cost more than $2,000 in a calendar year. Improvements to the home's exterior (windows, doors, insulation, skylights, and wiring) as well as central air conditioners, furnaces, and boilers are all eligible for a maximum of $1,200 credit. There are also limits on how much of a tax credit you may get for each appliance or improvement.

You can maximize your savings by spreading out your home energy efficiency renovations over a few years.

* Certain renewable energy technology, such as geothermal heat pumps, qualifies for a separate tax credit. There is no annual cap of $3,200 for these enhancements.

Tax Credits for Air Conditioners

Important info on tax credits for residential central air conditioning systems:

  • Eligible units get back 30% of the project cost, up to a $600 maximum limit.
  • All systems must be Energy Star Certified.
  • Split systems must have a SEER2 of greater than or equal to 16.
  • Packaged systems must have a SEER2 of greater than or equal to 15.2 and an EER2 of greater than or equal to 11.5.
  • The system must be bought and installed between January 1, 2023 and December 31, 2032.

Tax Credits for Air Source Heat Pumps

Important info on tax credits for residential air source heat pumps:

  • Eligible units get back 30% of the project cost, up to a $2,000 maximum limit.
  • All heat pumps must have earned the Energy Star label.
  • The system must have: Ducted Split System: SEER2 of at least 15.2 Packaged System: SEER2 of at least 15.2 Mini-Split System: SEER2 of at least 16.
  • The system must be bought and installed between January 1, 2023 and December 31, 2032.

What Properties Qualify for the Tax Credit?

  • Residential properties ONLY.
  • The property must be your principal residence.
  • The property can be a house, houseboat, mobile home, cooperative apartment, condominium or manufactured home.
  • The home must be an existing home - No new construction.
  • The property must be owned - no rentals.
  • The property must be located in the United States.

Tax Section 25C - Nonbusiness Energy Property Credit

Starting January of 2023, homeowners can receive up to $2,000 off the cost of installing an approved heat pump or a maximum of $600 for qualified air conditioners and furnaces. Investing in high-efficiency products means you get more bang for your buck with huge savings on taxes!

Please note that the qualification for the benefits is subject to change depending on if the IRS adopts the full criteria. 

High-Efficiency Electric Home Rebate Program

This tax credit provides rebates depending on a homeowner's income. They can be up to $8,000 for an all-electric heat pump installation and even more for additional electrical updates to your home. Our team will walk you through the fine print to ensure you receive the savings you have earned on a new AC installation.

Benson's For Rebates and Energy-Savings

Our team of knowledgeable professionals will help you understand which products qualify for what rebates and provide insight into the best options available to you. We'll make sure you get the most out of your energy-efficient purchase, so don't hesitate to contact us and see what federal tax credits can do for you! We also make sure to apply any local or state credits to your purchase in addition to federal rebates.

Let's start saving money today and take advantage of all the benefits these credits have to offer. Contact us now--we look forward to helping you reach your energy-saving goals!

We You Tallahassee!

Jackie Herring
Jackie Herring
19:41 22 Sep 23
Jacob explained everything he was going to be doing. Made me feel that he was confident in what he was doing. He explained the different service plans which helped me make the decision that is best for me. He was very professional and kept me in the loop every step of the way.
Ron Sagaert
Ron Sagaert
20:16 21 Sep 23
A truly first class company. Always available, always fair and always on time. They stand behind their product and their work! You have a customer for life in me! Thanks for giving your customers a quality experience.
Dale Dransfield
Dale Dransfield
21:30 19 Sep 23
Benson's has been caring for my HVAC needs for a number of years. I pay an annual fee and they show up twice a year to make sure everything is working properly. They always take extra care to leave the work area immaculate, clean the drains, replace the filters, etc. I recommend them to anyone looking for HVAC service.

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