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2023 Tax Credit for Installation Jobs

Mar 22, 2023 | General

If you know that your heating or air conditioning system is coming up on its last year or so of operation, you’re in luck! Recent legislation has made new federal tax credits available through the Inflation Reduction of 2022. This blog will explain how this new law benefits those preparing to upgrade their HVAC systems and other household appliances. 

Inflation Reduction Act Explained 

Due to the rising inflation costs, the U.S. Government passed the Inflation Reduction cost to slow the inflation rate. This law includes incentives for homeowners and business owners who make energy-efficient upgrades. The incentives are provisions made through tax credits and rebates to help offset the costs of purchasing and installing new heating, air conditioning, and generator systems. These programs are available through December 31, 2032, or until funds run out. 

Tax Credits Via Internal Revenue Code Section 25C for 2023

If you choose to make any energy-efficient upgrades in your home this year, you can claim up to $2,000 in tax credits, depending on the system you install. Each region of the U.S. has to meet specific criteria when installing heat pumps, air conditioners, and furnaces. Below are the requirements and the tax credit you can claim for each ENERGY STAR-certified heating or cooling product you purchase in Alabama. 

Heat Pumps

Purchases of the following types of heat pumps that meet the required ratings will be eligible for up to a $2,000 tax credit: 

  • Split Ducted Heat Pump – with SEER2 ≥15.2, EER2 ≥11.7, HSPF2 ≥7.8
  • Non-Ducted Heat Pump – with SEER2 ≥16, EER2 ≥12, HSPF2 ≥ 9
  • Packaged Heat Pump – SEER2 ≥15.2, EER2 ≥10.6, HSPF2 ≥7.2

Air Conditioners

Purchases of air conditioning systems that meet the standards outlined below can qualify for up to a $600 tax credit:

  • Split AC – with SEER2 ≥16.2, EER2 ≥12, 
  • Packaged AC – with SEER2 ≥15.2, EER2 ≥11.5


Purchases of gas-fired forced air furnaces must have a rating of ≥97% AFUE to qualify for up to a $600 tax credit. 

High-Efficiency Electric Home Rebate Program (HEEHRP)

In addition to providing generous tax credits, the U.S. Government also designed a program that offers income-based rebates on HVAC purchases. This program makes rebates available only to those who make high-efficiency electric upgrades on heat pumps and electrical systems. The program provides a maximum of $14,000 for all installations. 

To qualify for a 100% rebate through this program, your household income must be 80% of the local median income. However, if your income falls between 80% to 150%, you will qualify for a 50% rebate on your purchase. Unfortunately, those whose income is over 150% of the local median income do not qualify for any rebates. This rebate program was funded with four million dollars and will remain available until funds run out. 

What Does All of this Mean for Me?

The newly available tax credit and rebates mean purchasing new heating and cooling systems became easier. There is no better time to upgrade your home equipment to live a more comfortable life. But act now,  before funds run out for the rebates and tax credit program. 

Contact Hansen Super Techs for Quality HVAC Installations!

Take advantage of the new tax credits and upgrade your HVAC systems! Give Hansen Super Techs a call for a free estimate and to learn how you can make the tax credits work for you.