Frequently Asked Questions

Both the Energy Efficient Home Improvement Credit and the Residential Clean Energy Property Credit are nonrefundable personal tax credits. A taxpayer claiming a nonrefundable credit can only use it to decrease or eliminate tax liability. A taxpayer will not receive a tax refund for any amount that exceeds the taxpayer’s tax liability for the year.

Electrification simply refers to the process of replacing  systems and that use fossil fuels (coal, oil, and natural gas) with systems that use electricity as their source of energy.

The Federal Tax Credits and Rebates align with this concept of driving electrification thru incentives.

Most programs start on January 1, 2023, especially the tax credits and deductions. The 25C tax credit expansion starts for projects billed as of January 1, 2023...so NOW!

The HEEHRP rebates however will possibly be ready near the end of 2023, or early 2024 depending on each state's delivery schedule. Process and procedure for applying and qualifying are still being defined on the federal rebates. 

Starting in 2023, homeowners are eligible for a tax credit of 30% of the cost, up to $2,000, for heat pumps, and/or heat-pump water heater, in accordance with section 25C of the US tax code. Only certain models qualify for the tax credit, and you must have a tax liability from which to reduce your taxes. Consult your tax advisor for advice.

Per the 25C tax credit expansion, purchase and install a qualifying heat pump system that meets the criteria set forth by the Consortium for Energy Efficiency (CEE).

Why yes there is, up to $600 gas furnace tax credit as long it's 97% AFUE or greater!

In addition to limits on the amount of credit you can claim for any particular equipment installation or home improvement, there are annual aggregate limits.  The overall total limit for an efficiency tax credit in one year is $3,200.  This breaks down to a total limit of $1,200 for any combination of home envelope improvements (windows/doors/skylights, insulation, electrical) plus furnaces, boilers and central air conditioners.  Any combination of heat pumps, heat pump water heaters and biomass stoves/boilers are subject to an annual total limit of $2,000. 

HEEHRP is for low-to-moderate income homeowners and includes up to $8,000 in rebates for heat pumps, with additional rebates for electrical panel upgrades and other improvements. The cap is $14,000 maximum. Low income (making less than 80% area median income [AMI]) homeowners can receive 100% of the project cost in a rebate. Moderate income homeowners (making 80% to 150% AMI) can receive 50% of project cost also up to $8,000 in a rebate. 

Ex; Moderate income homeowners would have to spend $16,000 to get the full $8,000.

You're referring to the $8,000 in rebates for Heat Pumps called out in the HEEHRP. This process is currently in development and we’re awaiting guidance from the states.

Eligibility and the amount of the rebate depends on household income:

• For households below 80% of area median income, 100% of the system purchase price qualifies for the rebate up to $8,000.
• For households that fall within 80% to 150% of area median income, 50% of the system purchase price qualifies for the rebate up to the same $8,000.
• Households above 150% of area median income do not qualify for the HEEHRP rebate.

The process for qualification is still being developed, as of right now you can get a point of reference by looking at https://ami-lookup-tool.fanniemae.com/amilookuptool/ to see the Area Median Income (AMI) in your county by zip code.

The HOMES Act provides rebates for ALL homeowners based on overall energy savings from energy efficiency improvements, including heat pumps.  

•  Retrofits with Modeled energy savings of 20-34% qualify for 50% of project costs up to $2000 (rebate is doubled for lower income homeowners to 80% of project costs up to $4,000)

• Retrofits with Modeled energy savings of 35% or more qualify for 50% of project costs up to $4000 (rebate is doubled for lower income homeowners to 80% of project costs up to $8,000)

•Retrofits with Measured energy savings of 15% or more qualify for $100 per 1% of reduction from average home energy usage up to 50% of the project cost. (rebate is doubled to $200 per 1% of reduction from average home energy usage up to 80% of the project cost)

More to come here as these are still being developed, we expect there to be clarity here by end of 2023, early 2024.

Yes! You can combine your local utility rebates with federal tax credits. Awaiting further guidance on HEEHRP inventive stacking but all signs point to those also being combined with local utility rebates and potentially even federal tax credits.

Reach out to an American Standard Customer Care  Dealer in your area for details and solutions to maximize your tax credit!

After installation of your new tax credit qualifying Heat Pump or Air Conditioning system and/or gas furnace be sure to keep all of your receipts and documentation in preparation to file your year end taxes.

Details to follow but simply provide all info and documentation to your certified tax professional or follow the guided steps from your favorite web based tax professional website on processing your tax credit.

Send us a text at the bottom of this screen and we will do our best to steer you in the right direction!