Heat pumps are considered some 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.
What's more, right now the Inflation Reduction Act provides rebates of a maximum of $8,000, making it even more affordable than ever. So why wait? Call the pros at Connolly Electric & Mechanical to schedule your heat pump installation in Cottonwood & Prescott.
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. One of the ways it does that is by funding green technology and making efficient, eco-friendly home improvements more affordable.
Homeowners can benefit from major rebates and tax credits when they purchase energy-efficient upgrades including heat pumps. Now is a great opportunity to go green!
How Will the Inflation Reduction Act Affect 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, you have two main options for saving money. Which program you use 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. 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 can't exceed $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 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 applies to you or what the typical income for your community is? The nonprofit group Rewiring America has an online calculator you can use to find out. All you need is 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. Redeemable 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.
Distinct from the rebate, which is available at the time of purchase, the tax credit is applied as you file your taxes.* Don't lose 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 are only accessible after the purchase and installation of energy-efficient heat pump models.
At minimum, a heat pump needs to have ENERGY STAR® certification for the rebate or tax credit to apply. Additional details are available from our team at Connolly Electric & Mechanical.
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 as it is subtracted 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 lowers the total amount of money owed to the government when you file your taxes.
*Consult with a tax professional for full details on how to apply
Contact the Comfort Pros at Connolly Electric & Mechanical to Learn More About the Inflation Reduction Act Heat Pump Rebate and Tax Credit
Thanks to a high-efficiency heat pump, you can save money and protect the environment thanks to tax credits and rebates from the Inflation Reduction Act. Connolly Electric & Mechanical is happy to help you navigate the details on these discount programs so you receive the greatest savings possible! Our certified team is ready to help make your next heat pump installation Cottonwood & Prescott a seamless experience.