Inflation Reduction Act Explained: Save Big on HVAC Systems

Inflation Reduction Act Explained: Save Big on HVAC SystemsIs your older furnace struggling to keep up? Maybe your air conditioner has been making strange noises or losing efficiency. These are all signs that you’re due for an HVAC replacement. The good news is, this is a great time to replace your furnace or air conditioner with a newer, more energy-efficient model. The Inflation Reduction Act, which was passed in 2022, made provisions for tax credits and rebates for homeowners who invest in new HVAC equipment.

What Tax Credits and Rebates Are Available?

The Inflation Reduction Act is a sweeping piece of legislation that introduces tax credits and rebates for customers who purchase electric vehicles, power-generating equipment like solar panels and biomass stoves, and energy-efficient appliances. HVAC updates fall under that third category: energy-efficient upgrades.

The program through which most of these rebates are offered is called the HOMES rebate program. It offers a rebate of up to $8,000 per homeowner. The exact amount you are given will depend on the updates you make and on your family income.

If you’re willing to make the change to an electric HVAC system, you could save even more. The High-Efficiency Electric Home Rebate Act, another subset of the Inflation Reduction Act, offers low to middle-income families up to $8,000 for installing a heat pump. Heat pumps have a lot of advantages. They are low maintenance, energy-efficient, and well worth discussing with a heat pump installation contractor.

How Do Tax Credits and Rebates Work?

The rebates mentioned above both became active in 2023. They are currently scheduled to last until 2031, but there is a chance some states may terminate them early. So, if you’re considering a heating and air conditioning replacement, you should act soon to save.

If you do have a new heater or air conditioner installed, you will need to pay the full price upfront. Keep the receipt. Then, when you file your taxes, you can enter the purchase price and other basic information about the HVAC replacement. You’ll receive the tax credits you’re eligible for as a part of your tax refund.

Note that tax credits are a flat amount refunded from your total taxes. So, if you qualify for a $5,000 tax credit, the government will take $5,000 off your total tax bill for the year.

How Do You Schedule an HVAC Replacement?

If you’re interested in scheduling HVAC system replacement while these tax credits are active, contact us soon and schedule a quote. We can recommend the systems that qualify for the credits and help you choose between them. If you’re interested in switching to a heat pump, we can talk to you about the installation, what changes you would need to make to your home, and how much energy you could save by making the switch.

If you’re looking for a heating and AC replacement company in Pennsylvania, contact H & H Heating & Air Conditioning. Our expert technicians would be happy to discuss your options and tell you more about these tax credits.

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