Need an Incentive to Do your Taxes? You Can Upgrade Your HVAC System
Article published in Northampton Living
(April 2024)
EXPERT CONTRIBUTOR
KRISTINA SMITH
Berkshire Heating and Air Conditioning LLC
413 200 9116
berkshireheatingandairconditioning.com
Thanks to the Inflation Reduction Act of 2022, federal income tax credits are available to homeowners who want to upgrade their Heating, Ventilation and Air Conditioning (HVAC) systems, making the transition to energy-efficient HVAC technologies more affordable.
The act allows homeowners up to $3,200 annually to lower the cost of energy-efficient home upgrades by up to 30 percent, as well as up to $2,000 to upgrade to heat pump technology. These tax credits effectively reduce the out-of-pocket expenses associated with upgrading HVAC systems, making energy-efficient options more accessible to homeowners.
By leveraging these tax credits, homeowners can not only lower their upfront costs for HVAC upgrades but also benefit from long-term energy savings and environmental sustainability. These incentives play a vital role in encouraging homeowners to prioritize energy efficiency, contributing to reduced energy consumption, lower utility bills and a smaller carbon footprint.
Energy Star, a program run by the U.S. Environmental Protection Agency and U.S. Department of Energy to promote energy efficiency, recommends the following strategies to maximize federal tax savings. They suggest spreading home energy efficiency improvements over a few years, and planning upgrades to make the most of the annual credit amounts that can be claimed.
Get an Energy Audit
A home energy audit can identify the most cost-effective, potential energy efficiency improvements. When considering upgrading a heating and cooling system, Energy Star recommends optimizing attic insulation first, to reduce air leaks that lead to energy waste.
Upgrade your HVAC System
When replacing a heating and cooling system for maximum efficiency, purchase an air-source heat pump that qualifies for the energy efficient home improvement credit.
Replace Old Windows and Get a New Heat Pump Water Heater
Homeowners can claim up to $600, or 30 percent of the product cost, for upgrading windows in one taxable year, in addition to the discount for the heat pump water heater.
Ultimately, tax credits available under the Inflation Reduction Act represent a valuable opportunity for homeowners to invest in energy-efficient HVAC systems while enjoying financial incentives. By taking advantage of these tax credits, homeowners can make meaningful contributions to sustainability efforts, improve the comfort and efficiency of their homes, and realize significant long-term savings on energy costs. Berkshire Heating & Air Conditioning is here to answer any questions and, of course, assist with new installations.
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