Rebates & Tax Credits
Thinking about upgrading your HVAC system or water heater? Now is one of the best times to consider HVAC and water heater replacement, thanks to the Inflation Reduction Act (IRA).
Under the IRA, Chicagoland homeowners can now claim special rebates and tax incentives that can help make the cost of their replacements more affordable.
In this blog post, we’ll explain what the IRA is and how homeowners can qualify for available rebates and tax credits in the Chicago area. When you’re ready to take the next step toward your system replacement, we’ll be here to help you navigate the process and ensure a seamless installation.
Take Advantage of Home Energy Tax Incentives
In August 2022, the IRA was signed into law to help combat climate change by incentivizing energy-efficient home improvements. Under the IRA, homeowners may be eligible to receive tax credits for a portion of qualifying expenses related to their energy-efficient upgrades.
Homeowners making improvements to their primary homes from Jan. 1, 2023, through Dec. 31, 2032, may receive 30%, with an annual limit of $1,200, of the total installation cost for qualifying systems.
For certain systems, such as biomass stoves and boilers, the annual limit is $2,000.
Qualifications for Tax Incentives
Only certain systems qualify for tax credits under the IRA, so homeowners must be selective in their home improvement projects if they wish to reap the benefits of the program. Depending on the type of system being installed or replaced, the total credit amount may vary:
Heating & Cooling
All HVAC equipment installed with the intention of claiming a tax credit must meet or exceed specific efficiency tiers established by the Consortium for Energy Efficiency. Qualifying systems include central air conditioners, furnaces, boilers, biomass stoves, and heat pumps.
Here’s a breakdown of how much homeowners can expect to receive for their tax credit depending on which system they install:
- Central air conditioners: 30% of the cost, up to $600.
- Furnaces: 30% of the cost, up to $600.
- Boilers: 30% of the cost, up to $2,000.
- Biomass stoves: 30% of the cost, up to $2,000.
- Heat pumps: 30% of the cost, up to $2,000.
The IRA offers special tax credits for water heater replacements that satisfy the specific CEE requirements for energy efficiency. Homeowners may receive these tax credits depending on the type of water heater they have:
- Heat pump water heaters: 30% of the cost, up to $2,000.
- Efficient water heating equipment: 30% of the cost, up to $600.
Schedule an HVAC or Water Heater Installation in Chicagoland
Navigating the wide array of available tax incentives for HVAC and water heater installations can be overwhelming. At Duane Blanton Plumbing, Sewer, Heating & Cooling, our team understands the nuanced process of claiming available rebates and tax credits.
We’ll help you understand which systems qualify for savings and guide you through the process of claiming your credit on your next tax return.
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