Inflation Reduction Act

The Inflation Reduction Act (IRA) covers new and reinstated tax laws that will affect individuals and businesses, including a number of credits and deductions and/or rebates. These non-refundable home energy tax credits are currently in effect and are known as 25C Tax Credit. 

The High-Efficiency Electric Home (HEEH) Rebate Program’s start date is currently unknown / TBD and is awaiting guidance from DOE, EPA, and IRS.  The Home Owner Managing Energy Savings (HOMES) Rebate Program for whole-home retrofits starting on or after August 16, 2022 and are completed by September 30, 2031.

Specifically for HVAC, the Inflation Reduction Act can provide tax credits and point-of-sale rebates equaling thousands of dollars towards the replacement of aging equipment with the installation of high-efficiency HVAC equipment. Contact your local TemperaturePro expert and we can help find the solution that works for your home.

Nonbusiness Energy Property Tax Credit (Previous 25C Tax Credit) 

• This tax credit is eligible on the homeowner’s principal residence and must not exceed $500 in total credits received since 2005. 
• Nonbusiness energy property tax credit, a previous law under Section 25C, is extended to December 31, 2032 for property placed in service after December 31, 2021.

Energy Efficient Home Improvement 25C Tax Credit (Current System Credits)

• $600 for eligible air conditioners
• $600 for eligible furnaces
• and/or $2,000 annually for purchase of eligible electric heat pumps. 

Energy Efficient Home Improvement 25C Tax Credit (Current Energy Audit) 

• Must be conducted by a certified home energy auditor
• Must be the homeowner’s principal residence, and 
• Cannot be combined with the “High-Efficiency Electric Home Rebate Program” (HEEH).

Homeowners who improve their primary residence will find the most opportunities to claim a credit for qualifying expenses. Renters may also be able to claim credits, as well as owners of second homes used as residences. The credits are never available for improvements made to homes that you don’t use as a residence.

What HVAC equipment can qualify for the 25C Tax Credits? 

These expenses may qualify if they meet the requirements:

• Exterior doors, windows, skylights and insulation materials
• Central air conditioners, water heaters, furnaces, boilers and heat pumps
• Biomass stoves and boilers
• Home energy audits

For a complete list of eligible products visit The Consortium for Energy Efficiency. 

For the official requirements on what qualifies for the 25C tax credits and to view Frequently Asked Questions, visit the U.S. Department of Energy

To claim the tax credits on your federal income tax returns, we recommend TemperaturePro customers seek advice from a certified tax professional. However, in previous years, customers filing their own taxes needed to fill out Tax Form 5695 and follow these instructions provided from the IRS.

The specifics of the rebate programs are subject to variation across different states and are yet to be finalized. These programs may be administered either by utility companies or state-run entities. The bill includes a provision that urges the Department of Energy (DOE) and state initiatives to collaborate and ensure that the rebates are conveniently accessible to consumers at the time of purchase, integrated into their out-of-pocket expenses.

More Information will be provided as soon as it becomes available. Check with your local TemperaturePro experts for the latest information.