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25c Tax Credit

What You Need to Know!

25C Federal Tax Credit

What is the Inflation Reduction Act?
The Inflation Reduction Act is the largest clean energy investment America has ever made, with strategic incentives to make the transition to clean energy and a decarbonized life easy and financially smart.

Importantly, the IRA recognizes the key role of highly efficient, variable-capacity heat pumps in slashing domestic GHG emissions and lowering energy costs for Americans.

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  • A 10-year extension and expansion of existing 10% tax credit to 30%.
  • Begins with tax year 2023 (January 1, 2023), claim credit on your 2023 taxes.
  • Up to $600 per item: breaker panel, insulation, fossil fuel systems (meeting elevated efficiency limits) with maximum of $1,200 tax credit.
  • However, tax credit increases up to $2,000 max when adding a qualified heat pump installation to the project.*
  • The heat pump system must meet or exceed the highest performance tier set by the Consortium for Energy Efficiency (CEE).**
  • Households may claim annually through 2032.
  • You can receive a tax credit and a rebate for the same project.

*Interpretation of this provision varies across media channels. We’re actively pursuing a universally accepted interpretation.

**Efforts are underway to simplify the efficiency performance qualifications. Check back soon for updates.

FAQ: Frequently Asked Questions

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Download a Listing of our Heat Pumps that Qualify for the 25C Tax Credit

We’ve assembled a listing of our all-climate heat pumps that qualify for the 25C Tax Credit under the Inflation Reduction Act. Click the image to the right to download. Check back often as we’ll continue
to update this information.