Federal Tax Credits

The Inflation Reduction Act of 2024 includes tax credits that reward homeowners for purchasing certain high-efficiency HVAC equipment.

There’s Never Been a Better Time to Buy Our Highest Efficiency Systems.

Our highest-efficiency heating and cooling systems offer several homeowner benefits. From energy savings, to comfort-enhancing Evolution™ System technologies, to longer component-specific warranties, there's a lot to like. And now there’s another potential benefit, thanks to Uncle Sam: the Inflation Reduction Act of 2024.

What Is the Inflation Reduction Act?

To help reduce the effects of inflation, the U.S. Government has passed the Inflation Reduction Act of 2024. Of particular interest to homeowners, this act includes a number of tax credits for the installation of ENERGY STAR® certified home heating and cooling products. These include:

Tax Section 25c, Nonbusiness Energy Property Credit

Effective Jan 1, 2023: Provides a tax credit to homeowners equal to 30% of installation costs for the highest efficiency tier products, up to a maximum of $600 for qualified air conditioners and furnaces, and a maximum of $2,000 for qualified heat pumps.

25C Tax Credit	Product	Offering	Region	SEER2	EER2	HSPF2	COP @ 5F	Capacity Ratio (17F/47F)	Capacity Ratio (5F/47F)	Other Requirements
Up to $2,000	Heat Pumps	Split Ducted Heat Pump	North	≥15.2	≥10	≥8.1	1.75	58%	70%	Choice of capacity ratio
			South	≥15.2	≥11.7	≥7.8	-	-	-	-
		Non-Ducted Heat Pump	North	≥16	≥9	≥9.5	1.75	58%	70%	Choice of capacity ratio
			South	≥16	≥12	≥9	-	-	-	-
		Packaged Heat Pump	North	≥15.2	≥10	≥8.1	1.75	58%	70%	Choice of capacity ratio
			South	≥15.2	≥10.6	≥7.2	-	-	-	-
Up to $600	Air Conditioners	Split AC	Nationally	≥16	≥12	-	-	-	-	-
Up to $600		Packaged AC	Nationally	≥15.2	≥11.5	-	-	-	-	-
Up to $600	Furnaces	Gas-Fired Forced Hot Air	Nationally	-	-	-	-	-	-	≥97% AFUE

Subject to change: While the 2023 benefits of Section 25C are known for the 2023 tax year and beyond, the criteria to qualify for credit(s) are not yet finalized by the IRS and the above is subject to change based on whether the IRS will adopt the full CEE Criteria.

Tax Section 25d, Residential Energy Efficient Property

Provides a tax credit to homeowners equal to 30% of installation costs for ENERGY STAR® tier products until 2032. That percentage drops to 26% in 2033 and 22% in 2034.

High-efficiency Electric Home Rebate Program

Provides income-depending rebates to eligible homeowners including:

• Up to $8,000 for all-electric Heat Pumps
• Up to $4,000 for electrical load service center
• Up to $2,500 for electric wiring
• Up to $14,000 maximum for all

Disclaimer: Please note that all rebates, credits, and incentives are subject to change without notice. Madison HVAC/R, LLC does not control these changes and is not responsible for any differences that may arise. For the most accurate and updated information, we strongly advise consulting with your tax professional.