What are the Inflation Reduction Act Tax Credits for VA Homeowners?

So, you want to lower your energy costs by qualifying for the Inflation Reduction Act tax credits and rebate programs? 

Want to know how you can qualify for these credits and rebates while saving on energy costs with a new system. We can help.

Our team has been closely following how the Federal Inflation Reduction Act tax credits (IRA) of 2022 can apply to Virginia homeowners.

As the State of Virginia decides how these Inflation Reduction Act tax credits and rebates will be funded, we are working closely with our quality manufacturers like Carrier to remain aligned to ensure the equipment we offer is certified to qualify for the proposed tax credits and rebates as they are enacted.

Demystifying the Inflation Reduction Act tax credits opportunity for Homeowners 

In August of 2022, the Federal Inflation Reduction Act (IRA) was signed into law, authorizing tax credits and rebate programs designed to help households across the country save money and energy. The Inflation Reduction Act tax credits will make it more affordable for Virginia families to purchase energy efficient appliances when they need to, make repairs around their homes, and save money on their utility bills each month, through rebates and tax credits.  

25C – Inflation Reduction Act Tax Credits Guide for Installation of Qualifying Heat Pumps

The IRA provides for federal income tax credits for the installation of qualifying heat pumps through 25C – the Non-Business Energy Property Credit – an incentive that allows homeowners to claim up to 30% of eligible expenses or up to $600 per appliance and $1,200 per year (up to 10% and $500 lifetime) and up to $2,000/year for heat pumps. The IRA’s Energy Efficient Home Improvement Credit – Section 25C – provides up to $2,000 annually in tax credits to lower the cost of a heat pump installation by up to 30 percent. (What’s important to know about tax credits is that if no taxes are owed, no benefit will be received.)

Under the same tax provision, households can save 30 percent of the cost of electric service upgrades associated with heat pump installation, deducting up to $600 annually. The credit covers improvement to, or replacement of, a panelboard, sub-panelboard, branch circuits, or feeders that have a load capacity of at least 200 amps.

25 Tax Credits (Covers 30% of Costs)

For Qualified Electrification Upgrades

Total Annual CreditsTotal Annual Credits
Heat Pump$2,000
Heat Pump Water Heater$2,000
Other Upgrades$1,200
Annual Credit For Heat Pumps & Heat Pump Water Heaters$2,000
Heat Pump$2,000
Heat Pump Water Heater$2,000
Annual Credit for Other Upgrades$1,200
Air Conditioner$600
Water Heater$600
Electrical Panel$600
Energy Audit$150

How to select equipment that meets the IRA’s 24C tax credits and Max Out Your Incentives 

If you have questions on which equipment is rated and approved – reach out to us at (540) 399-1300 or schedule an appointment online to set a time for a visit and our technicians will explain more about this opportunity for VA homeowners.  

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