Federal Incentives: Tax Credits & Rebates
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What You Need to Know: 2022 Installations
As part of the Inflation Reduction Act of 2022, the US Internal Revenue Service (IRS) retroactively extended individual federal tax credits for qualified high-efficiency heating and cooling system installations in primary residences, from January 1, 2022, through December 31, 2022. Incentive levels and product qualification criteria remain unchanged from prior federal tax credits.
Energy Efficient Home Improvement Tax Credit EEHI (Non-Business Energy Property Credit 25C)
The WeatherKing® Air Conditioning Division of Rheem Sales Company, Inc. certifies that the models listed here (if placed in service after December 31, 2021, and before January 1, 2023, in a homeowner’s primary residence) meet the criteria of "Qualified Energy Property" as set forth by Section 25C of the Internal Revenue Code. The maximum amount an eligible homeowner may receive in federal tax credits for purchasing and installing qualifying products, whether those purchases are in the form of upgraded windows, insulation, HVAC equipment or other eligible improvements, is 10% of the installed cost, up to $500.
Effective January 1, 2022, through December 31, 2022
Limited to primary residences
No income requirements
Qualifications
VIEW EEHI QUALIFICATIONS (2022 INSTALLATIONS) >
2022 Manufacturer Federal Tax Credit Form
DOWNLOAD 2022 MANUFACTURER FEDERAL TAX CREDIT FORM – M-PLATFORM MODELS >
Frequently Asked Questions
What You Need to Know: 2023+ Installations
We want to help you take advantage of new incentives that could affect how you replace your heating and cooling systems. As part of the Inflation Reduction Act of 2022, you can now take advantage of enhanced tax incentives and a new state-administered consumer rebate program that were designed to encourage you to upgrade your HVAC systems with heat pumps and high-efficiency air conditioners and furnaces. This section provides important information on the Energy Efficient Home Improvement Federal Tax Credit (Tax Section 25C) and the High Efficiency Electric Home Rebate Program.
Energy Efficient Home Improvement Federal Tax Credit EEHI (Tax Section 25C)
Effective January 1, 2023, the Energy Efficient Home Improvement Federal Tax Credit (EEHI) gives you a tax credit equal to 30% of equipment and installation costs for the highest efficiency tier products, up to $600 for qualified air conditioners and $600 for qualified furnaces, as well as up to $2,000 for qualified heat pumps. Here are a few things you should know about the EEHI:
Effective January 1, 2023, through December 31, 2032
No lifetime tax credit cap
Not limited to primary residences
No income requirements
Increases the percentage of the credit from 10% to 30% of equipment and installation cost
Annual $1,200 nonrefundable tax credit for eligible HVAC systems, insulation and air sealing; and a $2,000 tax credit for eligible heat pumps
Qualifications
Meet or exceed CEE highest efficiency tier (excluding advanced tier)
Gas Furnaces:≥ 97% AFUE
Tax credit offsets federal taxes owed
Manufacturer Federal Tax Credit Forms for 2023+ Installations
DOWNLOAD M1-PLATFORM MODELS (COMING SOON)
Frequently Asked Questions
HIGH EFFICIENCY ELECTRIC HOME REBATE PROGRAM (coming soon)
The Electric Home Rebate Program offers consumer rebates on qualifying heat pumps, panel replacements and electrical wiring. Here are a few things you should know about the Electric Home Rebate Program:
Available Tax Rebates Based on Income
< 80% of Area Median Income
Up to $8,000 for electric heat pumps
Up to $4,000 for panel replacement Up to $14,000 per household80–150% of Area Median Income
Up to $4,000 for electric heat pumps Up to $2,000 for panel replacement Up to $7,000 per householdQualifications
Frequently Asked Questions
Q: Is the $2,000 tax credit for a heat pump system conditioned on replacing a central air conditioner and furnace?
A: No, replacement systems are eligible, and consumers who choose to replace an existing heat pump with a new heat pump can claim the credit.
Q: When will the High Efficiency Electric Home Rebate Program launch?
A: The Department of Energy is expected to issue rebate program rules in Q2 2023 and we expect the states to set up rebate programs for state constituent participation in Q4 of 2023.
Q: Can a customer claim both an Energy Efficient Home Improvement tax credit and a rebate through the High Efficiency Electric Home Rebate Program?
A: There is no statutory prohibition on a customer claiming both a credit and rebate, but the US Treasury Department must issue final implementing rules on incentive layering.
Q: How can I determine my eligibility to access a rebate through the High Efficiency Electric Home Rebate Program?
A: The US Department of Energy State & Community Energy Programs Office provides consumers with additional information on the High Efficiency Electric Home Rebate Program, including income qualification rules.
Find Local Incentives
Additional state, local and utility rebates may be available in your area. For more information, visit our FAQ page.
Maximize Your Savings
Get our Downloadable IRA Reference Guide to discover how you can take advantage of tax incentives in 2023 and beyond.
