How to Secure Your Rebate for a New Heat Pump in 2023

March 23, 2023

Heat pumps are 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're also more compact and easier to install than conventional heating and cooling systems.

In addition, right now the Inflation Reduction Act provides rebates of a maximum of $8,000, making new installation even more affordable. So don't wait! Get in touch with the comfort specialists at Pepper AC & Htg Inc to arrange heat pump installation in Justin.

What Is the Inflation Reduction Act

The Inflation Reduction Act of 2022 intends to reduce inflation's impact on the country. An increasingly popular strategy is 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 equipment such as heat pumps. Now is a great opportunity to go green!

How Will the Inflation Reduction Act Impact Me?

The Inflation Reduction Act helps lower residential energy costs by making heat pumps and other energy-efficient home upgrades more affordable. It does that in the form of rebates and tax credits.

When considering 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. A rebate covers the entirety 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 conditions 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're in or what the average income is in your area? The nonprofit group Rewiring America created an online calculator so you can find out. All you need is 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. 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.

Distinct from the rebate, which is used immediately during your initial 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 eligibility for the rebate or tax credit. You can get all the details from our team at Pepper AC & Htg Inc.

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 right away because it is 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, is something you redeem on your taxes.* It lowers the total amount of money you owe to the IRS after you've finished filing taxes.

*Consult with a tax professional for full details on how to apply

Reach Out to the Pros at Pepper AC & Htg Inc for More Information About the Inflation Reduction Act Heat Pump Rebate and Tax Credit

Thanks to a high-efficiency heat pump, you can save money and do your part for the environment thanks to tax credits and rebates from the Inflation Reduction Act. Pepper AC & Htg Inc can help with the specifics on these discount programs so you receive the greatest savings possible! Our certified team is ready to help make your next heat pump installation Justin a smooth and easy experience.