Making home performance upgrades has never been easier for homeowners throughout Bucks County, PA and Mercer County, NJ with the IRA! The Inflation Reduction Act of 2022 is packed full of over 100 new or revitalized programs to help the country combat climate change—including federal tax credits and rebates designed to help make certain home improvements more affordable.
At Princeton Air, we want you to maximize your savings while you create a more comfortable and efficient home. With our comprehensive services and an expert team, we’re your one stop shop for IRA-qualified home improvements like insulation, ductless mini split heat pump installation, and more!
What’s in the Inflation Reduction Act?
One of the best IRA incentives is an update of an old federal tax credit aimed to help taxpayers improve their home’s energy efficiency. The tax credit can be claimed for multiple years in a row from now until 2032 to reduce your federal tax liability by 30% of the cost of several home performance services.
The total amount you can claim on any given year is $3,200, broken into two separate groups:
- $2,000 for qualified air source heat pumps (including ducted and ductless mini splits) and heat pump water heaters
- $1,200 for a variety of services that include:
- Insulation and air sealing materials (labor is not included)
- Energy audits
- High efficiency HVAC systems including furnaces, boilers, and central AC
- High efficiency water heaters
Our team can help you work through the fine print and get the biggest tax credit possible!
How to Claim the IRA Tax Credit
We always recommend talking to your tax professional for specific details on how to file and claim and tax credits—however, you will need to fill out Form 5695, and the IRS does provide some instructions. In addition, Princeton Air will provide you with an itemized receipt for all of the work we have completed in order to make the process easier for you.
IRA Rebates
The Inflation Reduction Act also includes two new rebate programs to encourage homeowners to invest in energy efficient upgrades—however, neither of them are available just yet. Each state will be responsible for applying for funding and distributing it to its residents. The team at Princeton Air is keeping a close watch on when homeowners will have access to the IRA rebates in both Pennsylvania and New Jersey.
The Home Owner Managing Energy Savings (HOMES) rebate amount will be determined by the amount of energy savings the improvements provide, while the High Efficiency Electric Home Rebate Act (HEERA) will be exclusively for income-qualified homeowners.
Why Is Home Performance Included in the IRA?
The Inflation Reduction Act includes generous tax credits and rebates for improving a home’s energy efficiency because residential homes account for 20% of the carbon emissions in the United States. When you also consider that 70% of a home’s energy use goes to space heating & cooling and water heating, it makes sense why home performance has become a priority.
Regardless if you need insulation upgrades or an efficient heat pump, Princeton Air can help you find out what services will qualify for incentives—from the IRA heat pump tax credits to utility run HVAC rebates. For over 50 years, we’ve provided quality heating, air, and ventilation services to Pennsylvania and New Jersey.
