The Inflation Reduction Act (IRA) is a transformative federal law designed to help the United States achieve its climate goals and strengthen energy security. It has strong measures to fight climate change by aiming to cut carbon emissions by 31% - 44% by 2030. Assisting the United States in attaining its climate targets and strengthening energy protection, the legislation focuses on promoting job creation, lowering energy and healthcare costs for families, and establishing equitable taxation. This is the first law passed with significant climate legislation, therefore it will help accelerate a transition to a clean energy economy, raising the need for clean electricity resources.
In the Inflation Reduction Act, there are specific programs aimed to benefit residential homeowners: The High-Efficiency Electric Home Rebate Program (HEEHRP), HOMES Rebate Program, and the extension/enhancement of the 25C Tax Credit.
Image Reference: “Inflation Reduction Act.” Inflation Reduction Act | Mitsubishi Electric HVAC, Mitsubishi Electric HVAC, www.mitsubishicomfort.com/inflation-reduction-act#ira_homeowners. Accessed 21 Aug. 2023.
In this blog post, our aim is to inform our readers and demonstrate how this act can help you transition your home to clean energy affordably. The Energy Efficient Home Improvement (25C) Tax Credit is the most applicable to our services, though an accountant can help walk you through what is most beneficial for your home installation.
What is The Energy Efficient Home Improvement (25C) Tax Credit?
Begins with Tax Year 2023, Claim Credit in 2024
The Tax Credit Resets, So Households Can Claim Annually Through 2032 With Different Qualified Projects
Provides 30% Back on The Purchase and Installation Cost of Qualified Home Upgrades
So, if you were to fund a qualifying home heat pump installation that costs $3,000, you could get a credit of $900 to apply to taxes you owe that year. That's pretty great!
BUT, Tax Credit For Qualified Heat Pumps and Heat Pump Water Heaters is Capped at $2,000 or $3,200 if Paired With Other Energy Efficient Upgrades
What Mitsubishi Electric Products Are Qualified?
There are many Mitsubishi Electric products that have met the Consortium for Energy Efficiency's (CEE) highest tier.
To Further Explore This List, Click Here.
References:
“Inflation Reduction Act.” Inflation Reduction Act | Mitsubishi Electric HVAC, Mitsubishi Electric HVAC, www.mitsubishicomfort.com/inflation-reduction-act#ira_homeowners. Accessed 21 Aug. 2023.