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Helping Homeowners Save on Energy-Efficient HVAC

August 4, 2023

On August 16, 2022 the U.S. government signed into law the Inflation Reduction Act (IRA) in an effort to reduce greenhouse gas (GHG) emissions by 40% by 2030.

As part of the Inflation Reduction Act, homeowners have access to cost-saving options for purchasing energy efficient and electric appliances or making home improvements to electrify their home or increase its energy efficiency.

How Homeowners Can Save 

The Energy Efficient Home Improvement Tax Credit (25C) provides a federal tax credit to homeowners who install high-efficiency equipment. The previous Nonbusiness Energy Property credit of up to $500 was extended through 2022.

The amended Energy Efficient Home Improvement Credit, which begins in 2023 and extends through 2032, increases the tax credits as high as $600 for qualified air conditioner or gas furnace, and up to $2000 for qualified heat pump, heat pump water heater or boiler.

2023 Amendment

  • The 25C tax credit was amended for 2023 and will remain effective until Dec. 31, 2032.
  • Amendments include:
    • 30% of cost up to $600 (or $2,000 for HPs)
    • Gas furnace and air conditioner can be combined for a total credit up to $1,200.
    • Qualifying units meet or exceed the highest efficiency tier that is not the advanced tier.

How Can I Help Homeowners Take Advantage?

If you have installed new, high-efficiency equipment for customers on or after January 1, 2022, confirm that those products qualify for the tax credit. You can then add value and build trust by proactively contacting those homeowners to let them know that they qualify for a tax credit. Encourage them to consult their tax professional to confirm eligibility and submit the certificate with their federal tax return to receive the credit.

Need More Information?

Download ADP’s contractor and homeowner guides to take with you when visiting contractors or homeowners.

ADP F Series 120 V Air Handler




Note: Advanced Distributor Products LLC (“ADP”) is not a tax advisor and does not make any representation, warranty, guarantee, or other assurance as to whether a particular matchup qualifies or is eligible for a tax credit.   This document has been prepared for informational purposes only and is not intended to provide, and should not be relied on for, tax advice. The IRS is responsible for the implementation and administration of tax credits. There are important requirements and limitations for the homeowner to qualify for tax credits. Moreover, the tax laws are subject to change.  As a result, ADP highly recommends that you and your customers consult with a tax advisor regarding a homeowner’s qualification for a tax credit in their particular circumstances and verify and review the applicable tax laws and regulations. ADP expressly disclaims all liability for damages of any kind arising out of a homeowner’s claim for a tax credit.