In an effort to fight climate change and save the American people money, the Federal Government has introduced the Inflation Reduction Act, which will provide millions of homeowners across America with access to rebates and tax deductions when switching to electric home appliances.
At ServiceOne, we are dedicated to helping our customers save money while staying comfortable in their homes. As the Inflation Reduction Act will allow many homeowners to save money on home upgrades and utilities, we are here to keep you updated throughout the entire process. Below, we have provided an overview of the Inflation Reduction Act and what you can expect from it as a homeowner.
High Efficiency Electric Home Rebate Act (HEEHRA)
As part of the Inflation Reduction Act, and in an effort to conquer the country’s climate change goals, homeowners will be eligible for energy-efficient appliance rebates. More specifically, low and middle-income households will receive rebates covering either full or half costs of a heat pump installation. For low-income households, this rebate will cover up to $8,000 in an electric heat pump installation, as well as $1,750 for a heat pump water heater, $840 for an electric stove and $840 for an electric dryer. Medium-income households will receive a rebate of up to 50% of the prices listed above.
If required, low-income households could also receive $4,000 for an upgraded breaker box, $2,500 for upgraded electrical wiring and $1,600 for insulation, ventilation and sealing. For medium-income households, these rebates will be covered up to 50%. According to the most recent information, the maximum amount of rebates for each home caps at $14,000, depending on the income level.
If homeowners are considering switching to electric appliances and systems, they will also be able to deduct from their taxes up to 30% of the cost of upgrades to their homes,
including installing heat pumps, insulation and, importantly, upgrading their breaker
boxes to accommodate the additional electric load. These tax deductions will begin in 2023. For more information, you can read this document and don’t forget to talk to a tax professional before making tax decisions.
Switching to electric appliances
The rebates and tax deductions that the Inflation Reduction Act includes act as an incentive for homeowners to consider switching to electric home appliances and systems. By switching to electric, not only can you receive a rebate on the installation and labor costs, but also save money down the road on your energy bills and ultimately help in the fight against climate change.
As the Inflation Reduction Act comes to life in 2023, changes will more than likely occur, and our team at ServiceOne will do our best to keep you up to date with all information as details are finalized by the Federal and State Governments in the coming months. We are excited to be able to offer these services to our community.
This is not tax advice, please talk to a professional tax advisor when making decisions that will impact your taxes. Detail finalization is dependent on the Federal and State Governments, information is subject to change.
Last updated: 10/26/22