Inflation Reduction Act
TAKING ADVANTAGE OF THE INFLATION REDUCTION ACT TAX CREDITS: PATIENCE PAYS OFF
The Inflation Reduction Act of 2022 both extends and expands existing 25C and 25D tax credits to homeowners and 45L tax credits to home builders for installing applicable high-efficiency HVAC equipment. Each of these credits has specific efficiency requirements to qualify as outlined in the chart below. The bill applies to systems installed in 2022, and some of these credits will increase in 2023.
Here is a summary of the tax credits as they stand now, and for the coming years:
Tax Section
25C
2023-2032 Tax Credit Details
30% of cost up to $1,200 ($2,000 for Heat Pump)
Products must be in the highest efficiency CEE tier
Air Conditioners
- Up to $600 tax credit
Heat Pumps
-Up to $2,000 tax credit
Gas Furnaces and Boilers
- Up to $600 tax credit
Advanced Main Air Circulating Fan
- Must use no more than 2% of furnace's
total energy, up to $50 tax credit
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