$300 Federal Tax Credits are BACK!

  • September 6, 2022
  • By MR COOL

This past August, the $300 tax credit for qualifying HVAC systems returned and is here to stay until December 31st, 2032! 

This decision was a part of the Inflation Reduction Act, which is an effort to slow and reduce inflation while devoting money and resources to supporting energy efficiency and infrastructure throughout the nation. 

If it sounds a bit unfair to you because you just bought an HVAC system while the tax credit was not active, you’ll be happy to learn that you can retroactively apply for it through the end of the year if you bought your system in 2022. 

There are a few things to know about this exciting way to save money.

It Can Be Combined With Other Utility Rebates.

If you are in the middle of updating or renovating your house, you know that it can drain your account quickly, so every little place to save money truly counts. Being able to save $300 on your HVAC unit and potentially more on other appliances can drop the cost of renovation by hundreds, maybe thousands!

It Is a Federal Tax Credit.

This means that $300 gets taken off of the total amount of money that you owe during tax season! Tax season can be a stressful time of year, so applying for this credit allows for a little relief during this time. 

It Only Applies to Your Main Home of Residence

Unfortunately, this disqualifies those who rent and own various properties with HVAC systems that would otherwise qualify. You must live in the home that the system is installed in to be eligible for the tax credit. New construction also does not qualify. 

What Systems Qualify?

It depends on what system you have. When it comes to heat pumps, split systems must have an HSPF of 8.5 or higher, an EER of 12.5 or higher, and a SEER of 15 or higher. Package systems must have an HSPF of 8 or greater, an EER of 12 or greater, and a SEER of 14 or greater. For other systems, please visit Energy Star’s website. Systems must abide by CEE Tier II’s set criteria. 

Requirements like these mean that most of our DIY ductless mini-split systems qualify for this rebate! In order to see if your unit is eligible for this tax credit, please visit our Rebate Center! The Rebate Center allows you to see all tax credits and rebates currently available in your area. Rebate information in the Rebate Center is provided by EcoRebates, a third party service provider. Please be sure to check the rules and regulations set by the company or organization offering the rebate to ensure that your unit and installation abide by their stipulations. If your installation does not comply with these rules, it may invalidate your eligibility. 

Other systems besides heat pumps that this tax credit encompasses include central air conditioning, gas, propane, or oil hot water boilers, gas, propane, or oil furnaces and fans, non-solar water heaters, and advanced main air circulating fans. 

How Do I Apply?

In order to claim your tax credit, you must submit form 5695 alongside your tax information to the IRS during tax season. If you need assistance filling out this form, or you have any other questions regarding submitting this form or your tax information, please contact the IRS

Is There Anything Else I Need to Know?

While this information is exciting, it is still a developing situation and thus subject to change in 2023. Keep up to date by visiting energystar.gov

In light of this information, it may be a great time to plan your next DIY project! For that, no product is better than the DIY ductless mini-split heat pump system


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