Inflation Reduction Act–How To Leverage Tax Credits

As an experienced homeowner, you always want to improve your comfort and save money. The Inflation Reduction Act (IRA) gives you a winning strategy to do both.

Signed into law in August 2022, the Inflation Reduction Act provides tax credits and rebates to encourage New Jersey homeowners to swap out their old fuel-burning appliances for high-efficiency equipment that does a better job at a lower operating cost.

Now is the perfect time to replace your aging equipment—or upgrade to a heat pump to take advantage of tax incentives*.

Contact us today to schedule a free no obligation, in-home estimate.

Please consult a tax professional with specific questions.

Here is a closer look at the tax credits:

Tax Section

25C

2022 Tax Credit Details

10% of cost up to $500
Air Conditioners
- Up to $300 tax credit
Heat Pumps
- Up to $300 tax credit
Gas Furnaces and Boilers
- Up to $150 tax credit
Advanced Main Air Circulating Fan
- Must use no more than 2% of furnace's
total energy, up to $50 tax credit

2023-2032 Tax Credit Details

30% of cost up to $1,200 ($2,000 for Heat Pump)
Products must be in the highest efficiency CEE tier
Air Conditioners
- Up to $600 tax credit
Heat Pumps
-Up to $2,000 tax credit
Gas Furnaces and Boilers
- Up to $600 tax credit
Advanced Main Air Circulating Fan
- Must use no more than 2% of furnace's
total energy, up to $50 tax credit

Tax Section

25D

2022-2034 Tax Credit Details

Geothermal Heat Pumps
- 30% for systems placed in service
during calendar year 2022 through
calendar year 2032
- 26% for systems placed in service
during calendar year 2033
- 22% for systems placed in service
during calendar year 2034

Tax Section

45L

2022-2032 Tax Credit Details

Single Family
- Single Family New homes -
$2,500 tax credit
- Zero-energy Single Family New
Homes - $5,000 tax credit
Multifamily
- Multifamily Units - $500 tax credit
- Zero-energy Multifamily Units
- $1,000 tax credit