Making the Latest Heat Pump Tax Credits Easier to Understand

Understanding the implications of the Inflation Reduction Act and its impact on pricing jobs for installing heat pumps or heat pump water heaters can be daunting. However, a new resource from ENERGY STAR aims to simplify this process, specifically tailored for selling and installing Air Source Heat Pumps, Heat Pump Water Heaters, and Electric Panel Upgrades. It’s crucial for both contractors and property owners to grasp these credits, as they can cover up to 30% of project costs.

Here’s a quick overview:

Total Annual Limit: The $2,000 heat pump credit can be combined with credits up to $1,200 for other qualified upgrades made in one tax year.

Effective Date: Products purchased and installed between January 1, 2023, and December 31, 2032.

Tax Credit: An amount taxpayers can claim on their federal tax return to reduce income tax owed.

Who Qualifies: Must be an existing home and principal residence (owned or rented). Does not apply for new construction and rental properties.

What to Keep: Customers should keep their receipts and any relevant materials, such as product labels, that identify the purchased product.

For a simple one-page explanation and a list of qualifying products, check out the resource provided by ENERGY STAR.