Heat pumps are some of the most energy-efficient solutions for year-round comfort in your home. Not only do they save you money on electricity bills, but they also free up valuable space as they’re much smaller than traditional heating and cooling systems.
Additionally, right now the Inflation Reduction Act offers a rebate of up to $8,000, making new installation even more affordable. What are you waiting for? Get in touch with the comfort specialists at Precision Mechanical to schedule your heat pump installation in Rapid City.
What Is the Inflation Reduction Act
The Inflation Reduction Act of 2022 was created to reduce the impact of inflation on the country. One potential strategy is funding green technology and making efficient, eco-friendly home improvements more affordable.
You can earn these rebates and tax credits when you purchase energy-efficient equipment such as heat pumps. There has never been a better time to go green!
How Will the Inflation Reduction Act Impact Me?
The Inflation Reduction Act keeps utility costs lower by making heat pumps and other energy-efficient home upgrades more affordable. It does this through a combination of rebates and tax credits.
Regarding the Inflation Reduction Act heat pump rebates and tax credits, there are two ways to save money. Which program you use is dependent on your income.
The two programs available are:
- Inflation Reduction Act heat pump rebate
- Inflation Reduction Act heat pump tax credit
What Is the Inflation Reduction Act Heat Pump Rebate
The heat pump rebate in the Inflation Reduction Act is for low-income and moderate-income homeowners. Your rebate can cover the entire cost of heat pump installation for low-income homeowners and up to 50% percent for moderate-income homeowners.
The rebate has a maximum of $8,000 for both low-income and moderate-income homeowners. It is a point-of-sale rebate, which means it is deducted from the purchase price when you buy the heat pump.
The income criteria are:
- Low Income: Less than 80% of the area median income
- Moderate Income: 80-150% of the area median income
Not sure which income category applies to you or what the typical income for your community is? The nonprofit group Rewiring America has an online calculator you can use to find out. You only need to provide your ZIP Code and household income.
What Is the Inflation Reduction Act Heat Pump Tax Credit
For homeowners with incomes that exceed what qualifies for a heat pump rebate, there is an Inflation Reduction Act heat pump tax credit. With the option to recoup up to 30 percent after the purchase or installation of a heat pump, the heat pump tax credit is worth a maximum of $2,000.
Different from the rebate, which is accessible right at the time of purchase, the tax credit is applied as you file your taxes.* Hold onto the receipt, because the credit can be claimed the same year the heat pump was purchased.
*Consult with a tax professional for full details on how to apply
What Heat Pumps Qualify for the Inflation Reduction Act
The Inflation Reduction Act heat pump tax credits and rebates can only be used for the purchase and installation of energy-efficient heat pump models.
At the very least, a heat pump needs to have ENERGY STAR® certification for the rebate or tax credit to apply. Additional details are available from our team at Precision Mechanical.
How Do I Get the Inflation Reduction Act Rebate
For homeowners who qualify, the heat pump rebate in the Inflation Reduction Act can be earned right when you purchase the heat pump. You get it straightaway as it is subtracted from the price of purchase and installation of the heat pump. There’s no need to send in a proof of purchase or wait for a rebate to come later.
The Inflation Reduction Act heat pump tax credit, conversely, must be received after you file taxes.* It decreases the total amount of money owed to the government once you file taxes.
*Consult with a tax professional for full details on how to apply
Call Your Local Pros at Precision Mechanical for Details About the Inflation Reduction Act Heat Pump Rebate and Tax Credit
With the energy efficiency of a brand-new heat pump, you can save money and protect the environment thanks to tax credits and rebates from the Inflation Reduction Act. Precision Mechanical can help with the specifics on these discount programs so you get maximum savings! We're ready to help make your next heat pump installation Rapid City a smooth and easy experience.