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You may have heard politicians and commentators on television talking about the Inflation Reduction Act without paying much attention to what they were saying. At first glance, you may have thought of it as just another piece of complicated Washington legislation!
Actually, this law is much more than that. In reality, it can put money in the pockets of homeowners throughout the United States who install energy-saving equipment and appliances in their homes.
Please read on as we explain how you, an Illinois homeowner, can benefit from this new law.
Inflation Reduction Act
In August 2022, Congress and the President took an important step to aid American families through the passage of the Inflation Reduction Act (IRA). Included in the law were provisions establishing both the Energy Efficient Home Improvement Credit and the High Efficiency-Electric Home Rebate Program.
While the titles of these programs, in typical Washington fashion, are a bit cumbersome, they offer substantial financial incentives to you, the homeowner, to make your home “greener” through the use of new energy technologies.
Some incentives are now available, while others will gradually become effective over the next 12-24 months.
Benefits for Homeowners Under the Inflation Reduction Act
Summarized briefly and to the point, the Inflation Reduction Act of 2022 puts money in your pocket by providing rebates for making clean energy and energy efficiency improvements in your homes.
While some details of both programs are still being worked out in Washington, here’s a brief summary of the ways you might save a lot of money through these two programs included in the Inflation Reduction Act.
High Efficiency-Electric Home Rebate Program
Under this part of the IRA, households with a total income that is 150% or less of their area’s median income (AMI), as well as low-income families whose total income is less than 80% of their AMI are eligible for the rebate program.
Households whose income is between 80-150% of their AMI are eligible for rebates up to 50% of the project costs, up to the caps listed below.
Households whose income is less than 80% of their AMI are eligible for rebates equal to 100% of the project costs, up to the listed caps.
Some of the rebates in the law include up to:
- $1,750 for a heat pump water heater
- $8,000 for an HVAC heat pump
- $2,500 for electric wiring
- $4,000 for an electric load center upgrade
Energy Efficient Home Tax Credit
In addition to the rebates, the IRA also revised and revamped the Efficiency Tax Credits established under earlier legislation.
Beginning January 1, 2023, and running through 2032, eligible households will be able to claim a tax credit of 30% of the cost of energy-efficiency projects up to $1,200 a year. Some of these include:
- 600 for the highest efficiency tier of central air conditioners, as well as other qualified gas, electric, or propane HVAC systems, and electrical upgrades that will enable the energy-efficient upgrade.
- $2,000 for electric heat pumps and heat pump water heaters. This tax credit for the installation of heat pumps or heat pump water heaters does not count towards the $1,200 annual limit.
Have Questions? Call Pearson Plumbing, Heating & Air and We’ll Give You Answers!
That’s a basic summary of homeowner benefits under the Inflation Reduction Act, and we realize that we’ve thrown a lot of information at you. To say the least, these provisions can be a bit confusing!
If you’re interested in qualifying for either rebates or tax credits or both, or you have any questions about these programs, call your friends at Pearson Plumbing, Heating & Air.
We carry a large variety of energy-efficient RUUD and Weather King air conditioning and heating products, and we’ll be glad to discuss these programs with you and determine if you can qualify for the financial assistance provided by either or both of them.
We want to do all we can to help you keep save on energy costs and keep your hard-earned dollars in your pocket. So please don’t delay. Call Pearson Plumbing, Heating & Air today for more information on the ways you may benefit from the Inflation Reduction Act.
Finally, for the highest-quality heating, air conditioning, and repair services in the Rockford area, Pearson Plumbing, Heating & Air is the company to always call!