The Inflation Reduction Act (IRA), signed into law in 2022 by the Biden administration, offers federal tax credits to people who invest in energy-saving home improvements that help to reduce overall demand on fossil fuels and transition the world to cleaner and more efficient energy resources. Below, read about how the IRA can help you save money on clean energy upgrades made between now and 2032.
What The IRA Offers
Rebates through the Inflation Reduction Act are effective immediately and cut the upfront cost of having new equipment installed. This allows more people to make the switch to energy-efficient heating and cooling, which is an important part of reducing carbon emissions.
If you’re replacing a fuel-burning heat source like a wood stove or gas furnace, or are building a new structure in need of ENERGY-STAR certified appliances, these discounts may be available to you. Here’s a look at the possible rebates and how much you could get depending on what type of upgrades your property needs:
|Equipment||<80% of area Median Annual Income||80% to 150% of area Median Annual Income||>150% of area Median Annual Income|
|Heat Pump||100% of expenses up to $8,000||50% of expenses up to $8,000||Ineligible for some rebates|
|Electrical Wiring Upgrade For Heat Pump||100% of expenses up to $2,500||50% of expenses up to $2,500||Ineligible for some rebates|
|Electrical Panel Upgrade For Heat Pump||100% of expenses up to $4,000||50% of expenses up to $4,000||Ineligible for some rebates|
|Water Heater||100% of expenses up to $1,750||50% of expenses up to $1,750||Ineligible for some rebates|
|Total Rebates||Up to $14,000||Up to $14,000||Ineligible for some rebates|
IRA Rebates For Multifamily Homes
Landlords can also benefit from the new Inflation Reduction Act guidelines if they want to switch to more environmentally-friendly appliances in their rental homes. For these discounts, the income of at least half of the tenants has to be within a certain threshold, and some rebates are much smaller than those available for individual homeowners. Below is a chart for IRA rebates for multifamily homes.
|Equipment||≥ 50% of tenants are ≤ 150% of median area income||≥ 50% of tenants are ≤ 150% of median area income|
|Heat Pumps||Up to $8,000||May not be eligible|
|Electric Stoves||Up to $840||May not be eligible|
|Electrical Panel Upgrades||Up to $4,000||May not be eligible|
|Water Heaters||Up to $1,750||May not be eligible|
|Total||Up to $14,000||May not be eligible|
Tax Credits Through The Inflation Reduction Act
In addition to the rebate program, the IRA also offers tax credits. Unlike with rebates, you don’t have to meet any income limits to qualify for the credit and the contractor doesn’t have to mail anything to be paid for their work. Instead, simply provide the receipt at the time your taxes are filed. Any taxes that you owe will be decreased by the amount of the credit should you qualify. If you are due a tax refund, the IRA credit can increase this amount substantially.
|Ductless Heat Pumps||30% of installation cost up to $2000|
|Ground-Source Heat Pumps||30% of the whole installation cost|
|Water Heater Upgrade||30% of installation cost up to $2000|
|Electric Panel Upgrades||30% of upgrade cost up to $600|
Is Ductless Right For You? We Can Help You Decide
Switching to ductless is a big change, but it’s one that will benefit the environment – and your pocketbook – for many years to come. At Jones Services, not only can we help you determine if ductless heating and cooling is the best choice for your family, but we’ll also help you get the maximum available tax credits and rebates to help you save as much money as possible.
Contact us today to learn more about the benefits of ductless heating and cooling, what rebates and credits you may be eligible for, or to set up a time for our team to come to your home and provide you a free quote. Call now by dialing (845) 299-2359.