Heat pumps are some of the most energy-efficient solutions for year-round comfort in your home. Not only do they help lower your monthly electricity bill, but they're also more compact and easier to install than conventional heating and cooling systems.
In addition, right now the Inflation Reduction Act offers a rebate of up to $8,000, making it even more affordable than ever. What are you waiting for? Get in touch with the comfort specialists at JTech Mechanical to arrange heat pump installation in Magnolia.
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 efficient, eco-friendly home improvements more affordable.
You can earn these rebates and tax credits when you purchase energy-efficient upgrades including heat pumps. Now is a great opportunity to go green!
How Will the Inflation Reduction Act Influence My Energy Costs
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.
Regarding the Inflation Reduction Act heat pump rebates and tax credits, you have two main options for saving money. 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 rebate found 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 is capped at $8,000 for both low-income and moderate-income homeowners. It is a point-of-sale rebate, which means it is deducted from the purchase price when you buy the 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
Not sure which income category you're in or what the average income is in your area? The nonprofit group Rewiring America has an online calculator you can use to 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 whose income is too high to qualify for a heat pump rebate, there is an Inflation Reduction Act heat pump tax credit. With the option to recoup up to 30 percent after the purchase or installation of a heat pump, the heat pump tax credit is worth no more than $2,000.
Distinct from the rebate, which is available at the time of purchase, the tax credit is applied as you file your taxes.* Keep your 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 minimum, 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 JTech Mechanical.
How Do I Get the Inflation Reduction Act Rebate
If you are an eligible homeowner, the heat pump rebate in the Inflation Reduction Act is available when you purchase the heat pump. You get it promptly 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, alternatively, is something you redeem on your taxes.* It reduces 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
Contact the Comfort Pros at JTech Mechanical 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 thanks to tax credits and rebates from the Inflation Reduction Act. JTech Mechanical can help with the specifics on these discount programs so you can enjoy more savings! We're ready and able to help make your next heat pump installation Magnolia a smooth and easy experience.