Tax Credits & Rebates
Learn about options available for you to save on a new HVAC system, including new incentives from the Inflation Reduction Act (IRA).
Inflation Reduction Act Homeowner Incentives
In August 2022, the Inflation Reduction Act (IRA) made a groundbreaking commitment of approximately $370 billion to bolster climate and energy initiatives. This progressive act introduces enticing incentives for homeowners who invest in eligible, high-efficiency HVAC systems. This means homeowners upgrading their HVAC systems may not only save on energy costs, but also can earn tax credits and rebates.
For eligible equipment installed prior to Dec. 31, 2022
If you installed eligible HVAC equipment before December 31st, 2022, you may be eligible for tax credits of $50 to $300 or up to 10% of the installed costs, with a $500 maximum, under the former Internal Revenue Code 25C guidelines.
For eligible equipment installed after Jan. 1, 2023
If you installed/will install eligible HVAC equipment between January 1, 2023, and December 31, 2032, you may be eligible for tax credits up to 30% of installation costs (up to $1,200/year) under the expanded Energy-Efficient Home Improvement Tax Credit 25C program. Other changes to the 25C tax credit include:
- Qualified heat pumps have a separate yearly limit of up to $2,000.
- Air conditioners and furnaces that meet eligibility requirements may qualify for up to $600 each
Please note: The maximum 25C tax credit amount is $3,200 when a qualifying heat pump is included in the purchase.
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How do I apply for a tax credit?
For qualified HVAC improvements installed prior to Dec. 31, 2022, homeowners may be able to claim 25C tax credit equal to 10% of the installed costs, with up to $500 maximum. The extended tax credit is in effect for all qualifying systems and products installed during the 2018 through 2022 calendar years and expires on December 31, 2022. Subject to IRS regulations, tax credits apply as a direct reduction of taxes owed.
As per IRS regulations, these tax credits directly reduce the amount of taxes owed. To calculate and file for residential energy credits, the IRS recommends using Form 5695. For personalized guidance on applying for tax credits and tax preparation, it is advisable to consult with a tax professional.
What are rebate programs?
Increase your HVAC savings further by exploring rebate programs provided by state programs and local utilities. The energy efficiency rebate programs detailed in the Inflation Reduction Act are currently awaiting guidance from the Department of Energy. You can reach out to your state’s energy office for more information.
Please note that rebate programs differ by state and income level. To discover rebate programs that you may qualify for, we recommend speaking with a local representative from your state's energy office.
See below for the Ameristar residential products that qualify for a tax credit. Save these certificates for tax season and utilize them when you file your federal taxes.
*The 2023 application process is not yet available from the IRS. Check back for updates and certificates.*
Split system air conditioner
To be eligible for 2022 tax credits, you must meet both the 25C requirements of 16 SEER/13 EER.
Split system heat pump
To be eligible for 2022 tax credits, you must meet all three 25C requirements of 15 SEER/12.5 EER/8.5 HSPF.
To be eligible for 2022 tax credits, you must meet the 25C requirement of 95% AFUE.
Advanced main air circulating fan
To be eligible for 2022 tax credits, you must meet the 25C requirement of utilizing no more than 2% of total furnace energy.
To learn more about qualifying products and government energy-efficiency standards, visit the Federal Tax Credit page on the official Energy Star website.