Tax Credits for HVAC Installations in 2023

2023 Tax Credits for HVAC Installation

It is not a secret that air conditioners and heating systems can be pretty pricey. It is because of the high cost of these systems that most homeowners do their best to stretch the use of their HVAC units to the maximum. However, the need to replace a unit eventually becomes inevitable. If you’re in need of replacing or installing a new heating or air conditioning system in your house, there’s good news. 

Effective January 1, 2023, federal tax credits have become available for those homeowners who choose to purchase and install energy-efficient appliances in their homes. In this blog, we will shed light on what this means to you as a homeowner and how you can take advantage of these tax credits. 

What You Need to Know About the Inflation Reduction Act 

The Inflation Reduction Act of 2022 is a law that was designed for two purposes. Firstly, the Biden Administration implemented it as an attempt to slow down the rate of inflation. Secondly, our legislators made this law to extend tax credits for those businesses and individuals who choose to make energy-efficient upgrades with smaller carbon emissions. Thus, this law incentivizes those who purchase electric cars, solar power, and other energy-efficient appliances like air conditioners and heat pumps. 

25C Tax Credit for 2023

When homeowners make home improvements that are energy efficient in 2023, they will be able to take advantage of the 25C Tax Credit provided by the Inflation Reduction Act. This tax credit will cover up to 30% of installation costs for the highest efficiency products, up to $600 for air conditioners, and up to $2,000 for heat pumps. 

Requirements for Qualifying Upgrades

The amount of credit a homeowner will qualify for will depend on what part of the country they live in, what product they buy, and its efficiency levels. Below, we will outline some of these requirements for the southern part of the States, since many of our customers are in LaGrange and Columbus, GA, and their surrounding regions. 

Central Air Conditioners

If going forward you want to cool off with the help of a central air conditioner, you may qualify for up to 30% of installation costs, or up to $600 if you meet these requirements: 

  • Split Air Conditioners: Must be ENERGY STAR certified with SEER2 ≥16, EER2 ≥12
  • Packaged Air Conditioners: Must be ENERGY STAR certified with SEER2 ≥15.2, EER2 ≥11.5

Air Source Heat Pumps

Air source heat pumps (ASHPs) are heating and cooling systems that extract heat from the outside air to provide warmth during the colder months, and also cool your home in the summer months. This is a very earth-friendly solution as it doesn’t require nearly as much energy as gas or electric ACs and heaters. When you make this upgrade, you will need to make sure your heat pump meets the following parameters: 

  • Split Ducted Heat Pumps: Must be ENERGY STAR certified equipment with HSPF ≥ 7.8, SEER2 ≥ 15.2, EER2 ≥11.7
  • Non-Ducted Heat Pumps: Must be ENERGY STAR certified equipment with HSPF ≥ 9, SEER2 ≥ 12, EER2 ≥16
  • Packaged Heat Pump: Must be ENERGY STAR certified equipment with SEER2 ≥ 10.6, EER2 ≥15.2

If you meet these parameters, you can qualify for a tax credit of up to 30% of installation costs, or up to $2,000 for qualifying heat pumps. 


We all love to stay warm throughout the winter months in Georgia and furnaces are great for providing the needed warm temperatures. If the annual fuel utilization efficiency (AFUE) of your new furnace is greater or equal to 95%, you may qualify for a $600 tax credit.

High-Efficiency Electric Home Rebate Act (HEEHRA)

In addition to the tax credit, homeowners also have the option of taking advantage of rebates that are available for those who qualify. If you’re upgrading your home’s equipment and electrical systems to those that are more energy efficient, you can get these types of rebates:

  • Up to $8,000 for all-electric heat pumps
  • Up to $4,000 for electrical load service center
  • Up to $2,500 for electric wiring
  • Up to $14,000 maximum for all 

Take Advantage of These Tax Credits and Rebates Now!

Are you ready to make some necessary upgrades in your home on your heating and air conditioning systems? Call Air Force today to learn how to get started and save money, while you can. Get in touch at (706) 350-7896.

Air Force Heating and Air Favicon

Thanks for contacting us!

We will get in touch with you shortly.