This tax credit is effective for products purchased and installed between January 1, 2023, and December 31, 2032.
- How to Claim the Federal Tax Credits
- Strategies to Maximize Your Federal Tax Savings
- Claim the credits using the IRS Form 5695.
- Instructions for Form 5695
- Instructions for Form 5695 (Print Version - PDF)
YOU CAN CLAIM:
30% of project cost
$2,000 maximum amount credited
What Products are Eligible?
Heat pumps are either ducted or non-ducted (mini-splits). Eligibility depends on whether you live in the north or south.
Ducted
South: All heat pumps that have earned the ENERGY STAR label
North: Heat pumps designated as ENERGY STAR Cold Climate that have an EER2 > 10
Ductless (mini-splits)
South: ENERGY STAR certified heat pumps with
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SEER2 > 16
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EER2 > 12
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HSPF2 > 9
North: ENERGY STAR Cold Climate heat pumps with
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SEER2 > 16
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EER2 > 9
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HSPF2 > 9.5
Note: The information provided here about Air-Source heat pumps that are eligible for the tax credit is the most current available. Currently, eligible equipment must “meet or exceed the highest efficiency tier (not including any advanced tier) established by the Consortium for Energy Efficiency which is in effect as of the beginning of the calendar year.” The eligibility requirements are subject to change based on the final CEE Criteria and the Internal Revenue Service (IRS).
Annual Limits on Energy Efficient Home Improvement Tax Credits
In addition to limits on the amount of credit you can claim for any particular equipment installation or home improvement, there are annual aggregate limits. The overall total limit for an efficiency tax credit in one year is $3,200. This breaks down to a total limit of $1,200 for any combination of home envelope improvements (windows/doors/skylights, insulation, electrical) plus furnaces, boilers and central air conditioners. Any combination of heat pumps, heat pump water heaters and biomass stoves/boilers are subject to an annual total limit of $2,000. (Note: ENERGY STAR certified geothermal heat pumps are eligible for a separate tax credit and not counted against these limits.)
