Inflation Reduction Act
Thanks to the Inflation Reduction Act, all homeowners are now eligible for instant rebates and tax credits when purchasing energy-efficient electric appliances—the largest of which is for heat pumps! The rebate or tax credit amount you can receive varies depending on your household income, so you’ll want to read the details below to check your eligibility.
This not only allows you to save money on purchasing the equipment, but since you’re investing in high-efficiency models, you’re also saving money on your monthly energy bills, improving your indoor air quality, and limiting your impact on the environment.
What Are You Eligible For?
Of more than $700 billion in the Inflation Reduction Act, a total of $4.5 billion has been allocated for the High-Efficiency Electric Home Rebate Act (HEEHRA) for low and mid-income households. Another $4.3 billion has been allocated to the HOMES Rebate Program for homeowners who cut their energy usage. These rebates will be distributed by the state and tribal governments and will take effect starting January 1, 2023.
Additionally, under the Inflation Reduction Act, the existing Nonbusiness Energy Property Credit was renewed for 2022 and will be restructured as the Energy Efficiency Home Improvement Credit starting January 1, 2023.
The credit in 2022 is a maximum of $500 on certain energy efficiency improvements, including heat pumps, air conditioners, and heaters. This can be applied retroactively so talk to your contractor to see if you’re eligible.
In 2023, the credit will equal approximately 30% of your energy-efficiency improvement costs, including labor costs, up to:
- $2,000 for qualified heat pumps, heat pump water heaters, and boilers
- $600 for qualified air conditioners and heaters
This tax credit is available for all homeowners, but you must check if you qualify first. To qualify, you must use certain high-efficiency products and you’re only able to claim this if you owe taxes.
If you’re in the market for a new heat pump, central air conditioning unit, or heating unit, contact a local contractor today! You can find a reliable contractor near you by using iHeart Amana’s Brand “Find Local Dealer” tool.
Rebates and Tax Credits for Low-Income Homeowners
You qualify as low-income if your household earns less than 80% of your area’s median income.
As such, you are eligible for an instant rebate of up to:
- $8,000 for heat pumps
- $1,750 for a heat pump water heater
- $4,000 for an upgraded breaker box
- $2,500 for upgraded electrical wiring
- $1,600 for insulation, ventilation, and sealing
Keep in mind these are just the HVAC-related rebates! There are even more rebates available for other appliances, including electric stoves. The maximum rebate you can get from everything under the HEEHRA is $14,000!
For the HOMES Rebate program, you can receive a maximum of $8,000. Your instant rebate could be as much as:
- $4,000 for cutting your energy by 20%
- $8,000 for cutting your energy by 35%
You cannot combine these rebate programs. However, if you qualify, you can potentially get tax credits from the Energy Efficiency Home Improvement Credit.
Rebates and Tax Credits for Mid-Income Homeowners
If your household earns a middle income (80% to 150% of the area’s median income), you’re eligible for the same HEEHRA rebates above, but can only receive 50% of the costs of the project rather than 100% of costs.
Just like the low-income households, remember that there are additional rebates outside of HVAC-related appliances that are available to you and that the maximum total rebate you can receive from the HEEHRA is also $14,000.
You’re also eligible for the HOMES Rebate program, but you can only receive half the amount of low-income households—an instant rebate of up to:
- $2,000 for cutting your energy by 20%
- $4,000 for cutting your energy by 35%
But the same limitation applies. You must choose to apply for either the HEEHRA Rebate or the HOMES Rebate. And when tax season comes around, you could potentially qualify for the Energy Efficiency Home Improvement Credit.
Rebates and Tax Credits for High-Income Homeowners
As a high-income household, you’re only eligible for the HOMES Rebate program. You can receive an instant rebate up to:
- $2,000 or half the cost of the project (whichever is less) if you cut your energy costs by 20%
- $4,000 if you cut your energy costs by 35%
You can also receive the same Energy Efficiency Home Improvement Credit if you meet the qualifications.
If you have any questions about these rebates or tax credits, contact your local HVAC contractor! We make it easy with iHeart Amana’s Brand “Find Local Dealer” tool, which provides information on all Amana Brand dealers in your area. We only include the best Amana Brand dealers, so you know whoever you call will be reliable and professional!
