Heat pumps have been hailed as one of the most energy-efficient solutions for keeping your home cool in summer and warm in winter. Not only do they reduce your electricity costs, but they also free up valuable space as they’re much smaller than traditional heating and cooling systems.
Additionally, right now the Inflation Reduction Act offers a rebate of up to $8,000, lowering costs for new installation even further. So don't wait! Call the pros at Air Alliance Team to schedule your heat pump installation in Ballwin and St. Charles.
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 high-efficiency utility equipment and appliances more affordable.
You can earn these rebates and tax credits when you purchase energy-efficient systems like heat pumps. Now's the perfect time to go green!
How Will the Inflation Reduction Act Impact Me?
The Inflation Reduction Act keeps utility costs lower 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, there are two ways to save 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 rebate found in the Inflation Reduction Act is for low-income and moderate-income homeowners. The rebate covers 100 percent of the cost of heat pump installation for low-income homeowners and up to 50% percent for moderate-income homeowners.
The rebate is capped at $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 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 you fall into or what the median income is where you live? The nonprofit group Rewiring America created an online calculator so you can find out. You only need to provide your ZIP Code and household income.
What Is the Inflation Reduction Act Heat Pump Tax Credit
For homeowners that make too much to be eligible for the 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.
Different from the rebate, which is accessible right at the time of purchase, the tax credit is received once you have filed 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 Models of Heat Pumps Qualify 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 Air Alliance Team.
How Do I Get the Inflation Reduction Act Rebate
For qualifying homeowners, the heat pump rebate in the Inflation Reduction Act can be earned after purchasing the heat pump. You get it promptly since it's 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, conversely, is something you redeem on your taxes.* It reduces the total amount of money you owe the government after you've finished filing taxes.
*Consult with a tax professional for full details on how to apply
Contact the Comfort Pros at Air Alliance Team 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 do your part for the environment thanks to tax credits and rebates from the Inflation Reduction Act. Air Alliance Team is happy to help you navigate the details on these discount programs so you get maximum savings! Our certified team is ready to help make your next heat pump installation Ballwin and St. Charles a seamless experience.