2023 HVAC Tax Credits – Inflation Reduction Act
As of 1/1/2023 homeowners can qualify for up to $2,000 in federal tax credits when you install eligible heat pumps and air conditioners in your principal residence.
HVAC TAX CREDIT QUICK REFERENCE CHART*
*Regional Standards
Tax Credit | Equipment | Type |
---|---|---|
Up to $2000 | Heat Pump | Split HP |
Ductless HP | ||
Packaged HP | ||
Up to $600 | Air Conditioner | Split AC |
Packaged AC | ||
Up to $600 | Furnaces | – |
Up to $600 | Boilers | – |
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.
The most commonly installed systems are Air Source Heat Pumps, which do qualify for the tax credit up to $2,000 (up to 30% of the total project). To receive the credit, the system must meet or excel the efficiency ratings outlined in the above chart.
FAQs:
Q: Does my system that I bought before 1/1/2023 qualify for this tax credit?
A: No, only equipment installed after 1/1/2023 that meets the efficiency rating will qualify for the tax credit.
Q: Do I need to fill out any forms to receive the credit?
A: Yes, you must submit IRS Form 5695 and include it with your tax return. We recommend you consult a tax professional to ensure you receive the maximum benefit.