Have you heard about the 2022 Inflation Reduction Act? The Act includes many green energy initiatives, including tax credits and rebates for specific HVAC systems. How can this affect your household? We are waiting on specific details, as states will be crafting programs for citizens to tap into the $4.5 billion intended to discount or fully fund certain electrical appliances for low- and moderate-income families.
At Heating Specialties of South Jersey, we’re committed to giving our customers the best HVAC equipment and services that meet their budget. Let’s examine the new law and explain how it can save you money on HVAC equipment upgrades.
Tax credits
A tax credit is a reduction in your taxes to the government. You often don’t see tax credits until you file your tax returns, but these savings can add up and reward you with higher tax refunds. The new Act extends a previous tax credit that expired last year, offering a $300 tax credit on high-efficiency heat pumps. This may benefit customers who have an immediate need for a new HVAC system.
If you can wait until 2023, the Inflation Reduction Act includes tax credits of 30% of the cost of a new heat pump, up to $2,000. The Act also allows for an annual Energy Efficient Home Improvement Credit for up to 30% of the cost of energy-efficient upgrades. This tax credit used to be a one-time benefit for homeowners. Now you can take advantage of it annually. Spread out your promotions and enjoy tax credits each year.
Rebates
Depending on your income, you may be eligible for generous rebates on a new heat pump or other electric appliances like electric stoves and clothes dryers. These rebates are available to all households that earn less than 150% of the area median income. Families earning less than 80% of the area median income can receive rebates of up to $8,000 on the total cost of a heat pump. Those earning between 80% and 150% of the area median income qualify for a 50% rebate on a heat pump purchase.
This may sound complicated, but we expect the guidelines to become better understood as states present their programs for offering rebates.
So when should I upgrade MY HVAC SYSTEM?
That’s the million-dollar question. Many people hear about rebates coming in 2023 and assume they should wait until the state rebate program is in place. This may be the right financial move if your income is lower than average for the area. However, you also want to consider the bottom line. HVAC costs are expected to rise next year by 25%-30%. Waiting too long can cost you money. Upgraded units can also save you money on utility bills, so you want to grab those savings as soon as possible.
If you need a new system immediately or think you don’t qualify for rebates based on your income, let’s have a conversation. Heating Specialties offers several special deals throughout the year and financing to help homeowners with the cost of an ungraded HVAC system for their South Jersey home. Don’t try to make this decision on your own. Call the Heating Specialties team today at (866) 923-2653 or reach out online. We will explain your options and help you find a solution that keeps your home comfortable while saving you money in the long run.