Energy Efficient Furnace Tax Credit

[bbwhos]

Inquiring on Federal credits and State rebates for oil heat & AC conversion to heat pump heat & AC, where can I find credit details and requirements, i.e. specific type/models of products that qualify, income requirements,  etc. Also info on the electric panel upgrade to supply the new heat pump. Is this info available yet?

[Irish22_CPA]

Starting in 2023, the Residential Energy Credit will be equal to 30% of the costs for all eligible home improvements made during the year.

In addition, the $500 lifetime limit will be replaced by a $1,200 annual limit on the credit amount. So, if you spread out your qualifying home projects, you can claim the maximum credit each year. The annual limits for specific types of qualifying improvements will also be modified – and for the better. Beginning in 2023, they will be:

• $600 for natural gas, propane, or oil water heaters; natural gas, propane, or oil furnaces or hot water boilers; and electric panels and certain related equipment.
• $2,000 for electric or natural gas heat pump water heaters, electric or natural gas heat pumps, and biomass stoves and boilers (for this one category, the $1,200 annual limit may be exceeded).

Here is a list of qualifying equipment specifications: https://www.energystar.gov/about/federal_tax_credits/renewable_energy_tax_credits 

For eligible home improvements after 2024, no credit will be allowed unless the manufacturer of any purchased item creates a product identification number for the item, and the person claiming the credit includes the number on his or her tax return.

Finally, the revised credit will be extended through 2032.

High-Efficiency Electric Home Rebates

Although not a tax credit, the High-Efficiency Electric Home Rebate Program will also help American families go green. The program, which was added by the Inflation Reduction Act, will provide rebates to low- and middle-income families who purchase energy-efficient electric appliances. To qualify for a rebate, your family's total annual income must be less than 150% of the median income where you live.

Qualifying homeowners can get rebates as high as:

• $840 for a stove, cooktop, range, oven, or heat pump clothes dryer;
• $1,750 for a heat pump water heater; and
• $8,000 for a heat pump for space heating or cooling.

Rebates for non-appliance upgrades will also be available up to the following amounts:

• $1,600 for insulation, air sealing, and ventilation;
• $2,500 for electric wiring; and
• $4,000 for an electric load service center upgrade.

There are limits on the amount certain families can get, though. For instance, a rebate can't exceed 50% of the cost of a qualified electrification project if the family's annual income is between 80% and 150% of the area median income. Each qualifying family will also be limited to no more than $14,000 in total rebates under the program.

The $4.5 billion to be allocated for rebates will be distributed to families through state and tribal governments that establish their own qualifying programs. The funds will be available through September 30, 2031

[melj1]

The federal residential energy property credit does include energy-efficient heating and air conditioning systems. Energy start certified equipment is a good indicator of qualifying equipment. Information on the electric panel has not be addressed by the IRS as yet. The Department of  Energy sets the standards. The credits are $300 for any item of energy-efficient building property

I cannot give you any information regarding the states, as they differ and I do not know what state you are interested in. You may wish to your state's website. They may offer information.

Here is a link to more information from the IRS: https://www.irs.gov/newsroom/energy-incentives-for-individuals-residential-property-updated-question...