As your trusted HVAC contractor, we’re always looking for ways to help you get the most value for your investment—and right now, there’s a major opportunity to save thousands on new heating and cooling systems thanks to federal tax credits.
While these tax credits are in place through 2032, this is subject to change. Congress has the ability to make changes which can impact these incentives. In fact, there has been some discussion that these incentives may be impacted by current legislation. DON’T WAIT!
Whether you’re considering a traditional HVAC upgrade or going all-in with geothermal, the Inflation Reduction Act has made it easier (and more affordable) than ever to improve your home’s efficiency.
What HVAC Upgrades Qualify for Federal Tax Credits?
There are two main federal programs offering tax incentives for residential HVAC improvements:
1. Energy Efficient Home Improvement Credit (25C)
Currently available annually through 2032, this credit helps homeowners save on high-efficiency system upgrades. You can claim:
- Heat Pumps – Up to $2,000
- Air Conditioners and Furnaces – Up to $600
- Advanced Circulation Fans – Up to $150
- Insulation & Air Sealing – Up to $1,200 (combined with other upgrades)
- Home Energy Audits – Up to $150
All equipment must meet ENERGY STAR® efficiency standards and be installed by a qualified contractor.
2. Residential Clean Energy Credit (30% for Geothermal!)
This is where the real long-term savings kick in. Homeowners who install geothermal heat pump systems can claim a 30% tax credit on the full cost of the system, including installation.
What qualifies?
- Ground source (geothermal) heat pumps that meet ENERGY STAR requirements
- New construction and existing homes (owner-occupied or second homes)
Available through:
- 2022–2032: 30% credit
- 2033: 26% credit
- 2034: 22% credit
A geothermal system is a premium investment in your home’s value, comfort and sustainability, and with the 30% credit, it’s more attainable than ever.
Again, DON’T WAIT to take advantage of these tax credit incentives. Congress has the ability to make changes.
How Do I Claim the Tax Credit?
Simply file IRS Form 5695 with your federal tax return. Be sure to save:
- Itemized receipts from your contractor – we will provide
- Manufacturer’s Certification Statements – we will provide
- Installation date and system specs – we will provide
Bonus Tip: Geothermal systems may also qualify for local utility rebates or state incentives. Ask us how to stack your savings!
To learn more about federal tax credits for HVAC upgrades, contact W&W Residential Services. We specialize in HVAC installation, repair and routine services for various types of systems, including geothermal. We serve Northumberland, Union and Snyder counties.
