Inflation Reduction Act

The Inflation Reduction Act of 2022 includes incentives that reward homeowners for installing high-efficiency HVAC equipment

WHAT IS THE INFLATION REDUCTION ACT OF 2023?

The U.S. Government has passed the Inflation Reduction Act of 2022, a piece of legislation covering a broad spectrum of initiatives, including health care costs, clean energy, and the federal deficit among others. Of particular interest to homeowners, home builders and HVAC contractors, this act includes a number of incentives for the installation of high-efficiency home heating and cooling products.

HOW DOES THIS LEGISLATION AFFECT HOMEOWNERS?

For homeowners, this legislation makes stepping up to a higher efficiency home comfort system more affordable. And when they do, it can lead to higher satisfaction with HVAC systems that provide the additional comfort benefits of our premium products, including: • Potentially reduced monthly heating and cooling costs with highest efficiency models

THE REALITY ABOUT THE REBATES

• While the $4.3 billion rebate budget certainly catches your eye, it’s best to be patient and attentive to details for now. Here’s why:
• $4.3 billion in state-administered rebates on ENERGY STAR® certified equipment
• Extension and expansion of 25C, 25D, and 45L tax credits for CEE Highest Efficiency and ENERGY STAR® certified equipment
• Funds will be allocated to state energy offices with a fair amount of discretion on how they will be used.
• Depending upon the state, rebate programs may take some time to get implemented.
• Funding allocations will vary from state-to-state.
• The rebate program will not be available to all households. Households earning less than 80% of the median income can qualify for the full benefit. Those earning between 80 – 150% of the average median may be eligible for a partial (50%) benefit.
• Rebates will be subject to availability – the funds are capped, so they may run out before the ten-year period is over.
  

  Tax Credits Home Owners Can Claim

  25D - Residential Energy Efficient Property

  Projects in Place 2022-2032 - 30% credit Projects in Place 2033 - 26% credit Projects in Place 2034 - 22% credit

  25C - Non-Business Energy Property Credit

  Up to 30% of qualifying energy efficiency projects cost $500 lifetime cap is replaced by $1,200 allotted credit per year starting in 2023 $150 credit for a home energy audit Allotted credit of $2,000 for heat pumps

  45L - Energy Efficient Home and Multifamily Credit

  Incentives up to $5,000 per dwelling unit beginning in 2023 $2,500 for ENERGY STAR certified homes $5,000 for Zero Energy Ready certified homes

Which Equipment Is Eligible for a 2023 Tax Credit

25D - Residential Energy Efficient Property

30% of cost up to $1,200 ($2,000 for Heat Pump) Products must be in the highest efficiency CEE tier Air Conditioners- Up to $600 tax credit

Heat Pumps- Up to $2,000 tax credit

Gas Furnaces and Boilers- Up to $600 tax credit

Advanced Main Air Circulating Fan- Must use no more than 2% of furnace’s total energy, up to $50 tax credit

25C - Non-Business Energy Property Credit

• 30% for systems placed in service during calendar year 2022 through calendar year 2032
• 26% for systems placed in service during calendar year 2033
• 22% for systems placed in service during calendar year 2034

45L - Energy Efficient Home and Multifamily Credit

Single Family

• Single Family New homes - $2,500 tax credit
• Zero-energy Single Family New Homes - $5,000 tax credit

Multifamily

• Multifamily Units - $500 tax credit
• Zero-energy Multifamily Units
• $1,000 tax credit

For more information on Lennox HVAC Products please visit - https://www.lennox.com/owners/tax-credits/energy-tax-credits/