Heat pumps have been hailed as one of the most energy-efficient solutions for keeping your home cool in summer and warm in winter. Not only do they reduce your electricity costs, but they also free up valuable space as they’re much smaller than traditional heating and cooling systems.
In addition, right now the Inflation Reduction Act offers a rebate of up to $8,000, making new installation even more affordable. So don't wait! Contact the experts at Stanford Heating & Cooling to schedule your heat pump installation in Bloomfield.
What Is the Inflation Reduction Act
The Inflation Reduction Act of 2022 was written in hopes of reducing the effects of inflation on the country. An increasingly popular strategy is funding green technology and making sustainable HVAC systems more affordable.
You can earn these rebates and tax credits when you purchase energy-efficient systems like heat pumps. There has never been a better time to go green!
How Will the Inflation Reduction Act Affect Me
The Inflation Reduction Act keeps utility costs lower by making heat pumps and other energy-efficient home upgrades more affordable. It does that by recouping costs through rebates and tax credits.
When it comes to the Inflation Reduction Act heat pump rebates and tax credits, you have two options for lowering costs. The program you choose is dependent on your income.
The two programs available are:
- Inflation Reduction Act heat pump rebate
- Inflation Reduction Act heat pump tax credit
What Is the Inflation Reduction Act Heat Pump Rebate
The heat pump rebate in the Inflation Reduction Act is for low-income and moderate-income homeowners. The rebate covers 100 percent of the cost of heat pump installation for low-income homeowners and up to 50% percent for moderate-income homeowners.
The rebate has a maximum of $8,000 for both low-income and moderate-income homeowners. It is a point-of-sale rebate, which means you deduct the rebate from the initial purchase price of the heat pump.
The income criteria are:
- Low Income: Less than 80% of the area median income
- Moderate Income: 80-150% of the area median income
Unsure which income category you fall into or what the median income is where you live? The nonprofit group Rewiring America created an online calculator so you can find out. You only need to provide your ZIP Code and household income.
What Is the Inflation Reduction Act Heat Pump Tax Credit
For homeowners with incomes that exceed what qualifies for a heat pump rebate, there is an Inflation Reduction Act heat pump tax credit. Along with the ability to redeem the credit for up to 30 percent of the purchase or installation of a heat pump, the heat pump tax credit is worth no more than $2,000.
Different from the rebate, which is used immediately during your initial purchase, the tax credit is claimed when you do your taxes.* Hold onto the receipt, because the credit can be claimed the same year the heat pump was purchased.
*Consult with a tax professional for full details on how to apply
Which Heat Pumps Are Eligible for the Inflation Reduction Act
The Inflation Reduction Act heat pump tax credits and rebates only apply to the purchase and installation of energy-efficient heat pump models.
At the very least, a heat pump needs to have ENERGY STAR® certification for eligibility for the rebate or tax credit. Additional details are available from our team at Stanford Heating & Cooling.
How Do I Get the Inflation Reduction Act Rebate
For homeowners who qualify, the heat pump rebate in the Inflation Reduction Act can be earned right when you purchase the heat pump. You get it straightaway since it's deducted from the price of purchase and installation of the heat pump. You don't have to send in a proof of purchase or wait for a rebate to come later.
The Inflation Reduction Act heat pump tax credit, on the other hand, must be received after you file taxes.* It lowers the total amount of money you owe to the IRS once you file taxes.
*Consult with a tax professional for full details on how to apply
Contact the Comfort Pros at Stanford Heating & Cooling for Details About the Inflation Reduction Act Heat Pump Rebate and Tax Credit
With the energy efficiency of a brand-new heat pump, you can save money and protect the environment using tax credits and rebates from the Inflation Reduction Act. Stanford Heating & Cooling can help with the specifics on these discount programs so you get maximum savings! We're ready and able to help make your next heat pump installation Bloomfield a smooth and easy experience.