Taking Advantage of Tax Credits
Carrier understands how most homeowners need to balance comfort, energy consumption and the initial cost of the equipment. That’s why we offer a wide variety of products that help meet all these needs. And now, with the Inflation Reduction Act of 2022, many of our products qualify for 25C tax credits, making it more affordable for homeowners to get into a higher efficiency system.
WHAT IS THE INFLATION REDUCTION ACT OF 2022?
The U.S. Government passed the Inflation Reduction Act of 2022, a piece of legislation covering a broad spectrum of initiatives, including health care costs, clean energy, and the federal deficit among others.1 Of particular interest to homeowners, home builders and HVAC contractors, this act includes a number of incentives for the installation of high-efficiency home heating and cooling products.
The Inflation Reduction Act of 2022 both extends and expands existing 25C and 25D tax credits to homeowners and 45L tax credits to home builders for installing applicable high-efficiency HVAC equipment. Each of these credits has specific efficiency requirements to qualify as outlined in the chart below.2
25C
30% of cost up to $1,200 ($2,000 for Heat Pumps)
Products must align with CEE’s highest tier (excluding the advanced tier)
Air Conditioners
- Up to $600 tax credit
Heat Pumps
- Up to $2,000 tax credit
Gas Furnaces and Boilers
- Up to $600 tax credit
Advanced Main Air Circulating Fan
- Must use no more than 2% of furnace’s total energy, up to $50 tax credit
WHAT IS THE 25C TAX CREDIT?
25D
Geothermal Heat Pumps
- 30% for systems placed in service during calendar year 2022 through calendar year 2032
- 26% for systems placed in service during calendar year 2033
- 22% for systems placed in service during calendar year 2034
45L
Single Family
- Single Family New homes$2,500 tax credit
- Zero-energy Single Family New homes$5,000 tax credit Multifamily
- Multifamily Units$500 tax credit
- Zero-energy Multifamily Units$1,000 tax credit
Under the Inflation Reduction Act of 2022, tax section 25C allows for federal income tax credits for energy efficiency home improvements available through 2032. A broad selection of ENERGY STAR®-certified equipment is eligible for these 25C tax credits. Taking advantage of tax credits, along with any available rebates, is a good way to help make the transition to a clean energy future more affordable.
1 https://bidenwhitehouse.archives.gov/briefing-room/statements-releases/2022/08/15/by-the-numbers-the-inflation-reduction-act/
2 https://www.energystar.gov/about/federal-tax-credits
