Inflation Reduction Act Incentives

Rebates and incentives help make home improvements affordable for New York and Connecticut homeowners. Healthy Home Energy & Consulting can help you maximize your upfront savings with Inflation Reduction Act tax credits and rebates.

With IRA incentives, you can start to benefit from upgraded insulation and air sealing, indoor air quality services, and heat pump installation sooner.

What is the Inflation Reduction Act?

The Inflation Reduction Act was passed in 2022, and includes nearly $370 billion in investments aimed at fighting climate change. The IRA includes a number of incentives designed to help homeowners improve the energy efficiency of their homes, some of which are available right now.

Available Now: Inflation Reduction Act Tax Credits

The Energy Efficient Home Improvement Tax Credit is a revision and revamp of the older Section 25C of the Internal Revenue Code. The Inflation Reduction Act reinstated this tax credit and improved it in several meaningful ways.

The IRA tax credit allows taxpayers to offset their federal tax liability by 30% of the cost of a variety of qualifying energy efficiency upgrades. The total amount you can claim in a given year is $3,200, broken up into two separate groups:

$2,000 combined cap on heat pumps, ductless mini splits, and heat pump hot water heaters
$1,200 combined cap on insulation and air sealing (materials only), energy audits, electrical panel upgrades, windows and doors, and more

How do you claim the IRA tax credit? When you file your taxes for the year in which qualifying home improvements were made, fill out Form 5695—instructions from the IRS can be found here. Healthy Home Energy & Consulting is happy to provide you with an itemized receipt for work performed. We recommend that you work with a tax professional to ensure that your tax credit is calculated and submitted correctly.

Still to Come: Inflation Reduction Act Rebate Programs

The Inflation Reduction Act also created two new rebate programs.

The first, HOMES (Home Owner Managing Energy Savings), will offer rebates determined by the size of the energy savings (the more savings, the higher the rebates). The second, HEERHA (High-Efficiency Electric Home Rebate Act), will only be available to income-qualified households.

Neither of these rebates are available to the public yet—each state is responsible for setting up their own programs and distributing rebate funds. It’s not anticipated that any rebates will be available in either New York or Connecticut until the end of 2023, at the earliest—more likely, we’ll start to see rebates sometime in 2024. For this reason, we don’t recommend waiting—IRA tax credits are currently available now, in addition to state rebates and financing options, which offer significant savings and the opportunity to start benefiting immediately from Healthy Home’s services.