Commercial HVAC

HVAC Tax Credits – Inflation Reduction Act

Are You looking for HVAC Tax Credits? If you’re planning to replace or upgrade your HVAC system, you may be interested in the HVAC Tax Credits available under the HVAC Inflation Reduction Act. This law provides incentives for homeowners to invest in energy-efficient heating and cooling systems, which can help reduce their energy bills and carbon footprint.


HVAC Tax Credits

One of the most significant tax credits available under the HVAC Inflation Reduction Act is the Section 25C credit. This credit provides a dollar-for-dollar reduction in your federal income taxes for up to 30% of the cost of certain HVAC upgrades, including new air conditioners, furnaces, and heat pumps.

To be eligible for the Section 25C credit, your HVAC system must meet certain energy-efficiency requirements. For example, air conditioners must have a Seasonal Energy Efficiency Ratio (SEER) of at least 15.2. Furnaces must have an Annual Fuel Utilization Efficiency (AFUE) of at least 96%. Heat pumps must have a Heating Seasonal Performance Factor (HSPF) of at least 9. For a more in-depth look at the actual breakdown please see the chart section. The complete revision of the act can be found on the IRS Website.

In addition to the Section 25C credit, there are other tax credits available under the HVAC Inflation Reduction Act.  Section 45L credit for new energy-efficient homes and the Section 48 credit for renewable energy systems. These credits can also help reduce the cost of investing in energy-efficient HVAC systems.

To claim the Section 25C credit and other tax credits under the HVAC Inflation Reduction Act, you must file Form 5695 with your federal tax return. Be sure to keep receipts and other documentation of your HVAC system upgrade.  The IRS may request proof of eligibility for the credit.


Investing in an energy-efficient HVAC system not only saves you money on your energy bills but also helps protect the environment. With the incentives provided by the HVAC Inflation Reduction Act, it’s easier than ever to make the switch to energy-efficient heating and cooling systems. Consult with an HVAC professional to learn more about your options and eligibility for these tax credits.

AAA Heating & Air, LLC
844 Founders Rd, Lexington, SC 29073
(803) 920-3771