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The Inflation Reduction Act of 2022 (IRA) offers significant benefits for homeowners looking to upgrade their HVAC systems to more energy-efficient models. 

Energy Efficient Home Improvement Tax Credit (25C)

The renewed Energy Efficient Home Improvement Tax Credit (25C) increases the tax credit limit for installing CEE Top-Tier high-efficiency equipment – such as heat pumps, central air conditioning systems, furnaces, and more – and extends the offering through 2032.

The 25C credit has an annual cap of $1,200 – including up to $600 for a qualified air conditioner or gas furnace – or up to $2,000 with a qualified heat pump, heat pump water heater or boiler. There are no income requirements for this tax credit, and it cannot be combined with other federal programs such as the HEEHRP. However, the 25C tax credit may be eligible to combine with local or utility rebates.


  • Reduced upfront costs: The tax credit effectively lowers the upfront cost of purchasing and installing a new, energy-efficient HVAC system.
  • Long-term savings: These systems typically operate at lower energy consumption, leading to reduced utility bills over time.
  • Environmental impact: Encouraging energy efficiency helps decrease overall energy demand and contributes to a cleaner environment.

Other Highlights:

  • The credit applies to installations completed after December 31st, 2022 through 2032.
  • Only certain high-efficiency models qualify for the credit. Check with Pro Temp Mechanical to learn more.
  • You must have sufficient tax liability to benefit from the credit. Consider consulting a tax advisor for specific guidance.