The 2022 Inflation Reduction Act was designed to lessen the impact of rising inflation and also to reward families for improving the energy efficiency of their home in an effort to tackle climate change. As part of this legislation, the U.S. federal government approved new tax credits for single-family homes that upgrade to high-efficiency furnaces, air conditioners, and heat pumps. Here is a quick overview of this new tax credit program and which HVAC units qualify.
Tax Credits and Qualifying Units
The Inflation Reduction Act established the new Section 25C tax credit that is available for installing qualifying HVAC units and making other upgrades that improve the overall energy efficiency of the home. The new tax credit went into effect on January 1, 2023, and it is set to continue until December 31, 2032.
The new program authorizes total tax credits worth up to $3,200 a year. You can get a credit of up to $600 each for installing a new gas furnace and a new central air conditioner. New heat pumps can also qualify for a credit worth up to $2,000. However, all credits are capped at a maximum of 30% of the total purchase and installation cost for the new unit.
It is important to note that not all new units qualify for the new tax credit. To meet the requirements, the new unit has to be ENERGY STAR-rated and have a certain energy-efficiency rating. Heat pumps must be rated at least 10 HSPF and 18 SEER2. Furnaces must be rated at least 97% AFUE, and air conditioners must be rated at least 17 SEER2.
At Unitedly Service Group, we carry a range of different furnaces, air conditioners, and heat pumps that meet these requirements and will qualify you for a tax credit. We carry approved units from top brands like Amana and Daikin, and our team can help you choose the right unit to ensure you qualify under the new tax credit program. Our technicians also specialize in heating and cooling repairs and maintenance as well as indoor air quality services. For more information on your options for a new HVAC unit in Rochester, contact us at Unitedly Service Group today.