Inflation Reduction Act

January 1, 2023 new tax credits were released as part of the IRA (Inflation Reduction Act).  The credits cover new air conditioners as well as new heat pumps purchased and installed beginning in 2023 through 2032.

Credits are capped at 30% of the project cost, up to $3,200 annually for all energy efficient improvements. In addition, the credits are only available for an existing primary residence.  In other words, existing home not used for rental income.

Air Conditioners must be ENERGY STAR certified.  

• Split Systems with SEER2 greater/equal to 16 
• Packaged Systems with SEER2 greater/equal to 15.2, EER2 greater/equal to 11.5 (includes gas & electric package units).

Heat Pumps must be ENERGY STAR certified.  

• Ducted Split Systems with HSPF greater/equal to 7.8, SEER2 greater/equal to 15.2, EER2 greater/equal to 11.7
• Packaged Systems with SEER2 greater/equal to 15.2, EER2 greater/equal to 11.5 (including gas/electric package units)
• Ductless Min Split Systems with SEER2 greater/equal to 16, EER2 greater/equal to 12, HSPF2 greater/equal to 9

https://www.energystar.gov/about/federal_tax_credits 

https://www.irs.gov/credits-deductions/home-energy-tax-credits