Act Now on Energy-Efficient Tax Credits for Heating and Air
Homeowners still have time to take advantage of federal tax credits for energy-efficient home improvements before December 31, 2025. These incentives can significantly reduce the cost of installing high-efficiency heating and air systems and heat pump water heaters. Acting now ensures you lock in savings before these programs phase out.
Heating and Air Tax Credits Under the Inflation Reduction Act
The Energy Efficient Home Improvement Credit (Section 25C) allows homeowners to claim 30% of the cost of qualifying heating and air system upgrades, up to an annual cap of $3,200. This includes:
- $2,000 for heat pumps (air-source or geothermal) and heat pump water heaters.
- $1,200 for other energy-efficient improvements like insulation, windows, and doors.
Eligibility Requirements:
- Equipment must meet ENERGY STAR® and CEE efficiency tier standards.
- Installed in your primary residence in the U.S. before December 31, 2025.
Important: Congress shortened the original deadline from 2032 to 2025, so these credits expire at the end of this year.
Heat Pump Water Heater Tax Credits: Save Up to $2,000
Heat pump water heaters are one of the most cost-effective upgrades for homeowners. Here’s what you need to know:
- Credit Amount: 30% of total cost (equipment + installation), capped at $2,000 annually.
- Eligibility: Must be ENERGY STAR-certified and meet the highest efficiency tier set by the Consortium for Energy Efficiency (CEE).
- Deadline: Installation must be completed by December 31, 2025.
- Documentation: Keep receipts, product certifications, and include the Qualified Manufacturer ID (QMID) on your tax return starting in 2025.
These credits are part of the Inflation Reduction Act and can be combined with other rebates for even greater savings.
Frequently Asked Questions (FAQ)
Homeowners can claim 30% of the cost of qualifying heating and air systems, up to $3,200 annually, under the Energy Efficient Home Improvement Credit.
Yes! Heat pump water heaters qualify for a 30% tax credit, capped at $2,000 per year, if they meet ENERGY STAR and CEE standards.
You must file IRS Form 5695 with your federal tax return and include all required documentation.
Absolutely. Federal tax credits can be combined with state and utility rebates for even greater savings.
The credits expire on December 31, 2025, so act now to maximize your savings.
Ready to Upgrade? Contact Baker Home Energy Today
Don’t wait—these tax credits expire soon! Upgrade your heating and air system or water heater now to lock in savings. Baker Home Energy offers expert installation and guidance to ensure your system qualifies for all available incentives.
Call us at 877.578.8080 or visit Baker Heating and Air Services and Baker Water Services to schedule your upgrade today.
