Heat pumps have been hailed as one of the most energy-efficient solutions for keeping your home comfortable all year-round. Not only do they help lower your monthly electricity bill, but they can help minimize strain on any other heating and cooling systems.
In addition, right now the Inflation Reduction Act can offer you a rebate of no more than $8,000, lowering costs for new installation even further. So why wait? Contact the experts at Tokay Heating and Air Conditioning to request heat pump installation in Lodi.
What Is the Inflation Reduction Act
The Inflation Reduction Act of 2022 intends to reduce inflation's impact on the country. One of the ways it does that is by funding green technology and making high-efficiency utility equipment and appliances more affordable.
You can earn both rebates and tax credits after purchasing energy-efficient systems like heat pumps. There has never been a better time to go green!
How Will the Inflation Reduction Act Impact Me?
The Inflation Reduction Act affects you and other homeowners 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, there are two ways to save money. The ideal option depends 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. Your rebate can cover the entire 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 subtract the rebate from the initial cost of a new heat pump.
The income guidelines are:
- Low Income: Less than 80% of the area median income
- Moderate Income: 80-150% of the area median income
Unsure which income category applies to you or what the typical income for your community is? 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.
Unlike 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 are only accessible after the purchase and installation of energy-efficient heat pump models.
At the very least, a heat pump must have ENERGY STAR® certification for eligibility for the rebate or tax credit. Ask for more information from our team at Tokay Heating and Air Conditioning.
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. There’s no need to send in a proof of purchase or wait for a rebate to come later.
The Inflation Reduction Act heat pump tax credit, conversely, is something you redeem on your taxes.* It decreases the total amount of money you owe to the IRS when you file your taxes.
*Consult with a tax professional for full details on how to apply
Reach Out to the Pros at Tokay Heating and Air Conditioning for More Information About the Inflation Reduction Act Heat Pump Rebate and Tax Credit
With a high-efficiency heat pump, you can save money and do your part for the environment courtesy of tax credits and rebates from the Inflation Reduction Act. Tokay Heating and Air Conditioning can help with the specifics on these discount programs so you receive the greatest savings possible! We're ready to help make your next heat pump installation Lodi a stress-free experience.