Federal Tax Credit

Federal tax credit available for residents of Maryland


Thermal Plus LLC

1/2/20233 min read

Tax Credit Thermal Plus
Tax Credit Thermal Plus

The Federal Tax Credit: Empowering Energy Efficiency through HVAC Unit Replacement, Including Air Source Heat Pumps

In recent years, there has been a growing emphasis on sustainable living and reducing our carbon footprint. As we strive towards a greener future, energy-efficient HVAC (Heating, Ventilation, and Air Conditioning) systems, including Air Source Heat Pumps (ASHPs), play a crucial role. To incentivize homeowners to make eco-friendly choices, the federal government has introduced tax credits for HVAC unit replacements, including ASHPs. In this blog post, we will explore the benefits of the current Air Source Heat Pumps Tax Credit and shed light on how it can make a significant impact on your household's energy efficiency and financial well-being.

Understanding the Air Source Heat Pumps Tax Credit:

The federal government recognizes the importance of upgrading HVAC systems to improve energy efficiency, specifically highlighting the advantages of Air Source Heat Pumps. Under the current tax provisions, homeowners who replace their old HVAC units, including traditional heating systems, with qualifying heat pumps can claim a tax credit. This credit helps reduce the overall tax liability, encouraging individuals to invest in greener technologies.

Eligibility Criteria for the Air Source Heat Pumps Tax Credit:

To qualify for the Air Source Heat Pumps Tax Credit, homeowners need to meet specific eligibility criteria. These include:

  • Purchasing and installing qualifying ASHP equipment between specific dates designated by the federal government.

  • Ensuring the ASHP unit meets or exceeds the energy efficiency requirements outlined in the tax credit guidelines.

  • Retaining the manufacturer's certification statement for the ASHP unit, which confirms its eligibility for the tax credit.

Financial Benefits of the Air Source Heat Pumps Tax Credit:

The Air Source Heat Pumps Tax Credit provides homeowners with significant financial savings. By replacing traditional heating systems with energy-efficient ASHPs, you can enjoy lower utility bills and reduced energy consumption. Additionally, the tax credit directly reduces your overall tax liability, making the investment in an ASHP even more financially appealing.

Environmental Impact of Air Source Heat Pumps:

Air Source Heat Pumps not only benefit homeowners financially but also have a positive impact on the environment. ASHPs operate by transferring heat between indoor and outdoor air, reducing the need for traditional fossil fuel-based heating systems. By embracing ASHP technology and taking advantage of the tax credit, homeowners actively contribute to reducing greenhouse gas emissions and combatting climate change.

How to Claim the Air Source Heat Pumps Tax Credit:

To claim the Air Source Heat Pumps Tax Credit, homeowners need to complete the appropriate forms provided by the Internal Revenue Service (IRS) during tax season. It is important to gather all necessary documentation, such as invoices, receipts, and the manufacturer's certification statement, to support your claim. Seeking guidance from a tax professional or accountant can help ensure accurate claiming of the tax credit and maximize the financial benefits.

Investing in energy-efficient HVAC systems, such as Air Source Heat Pumps, not only enhances your home's comfort and reduces utility bills but also positively impacts the environment. The current Air Source Heat Pumps Tax Credit serves as a valuable incentive, making it easier for homeowners to embrace energy-efficient technologies. By taking advantage of this tax credit, you can significantly reduce your tax liability while contributing to a greener, more sustainable future. Explore the options available, consult with HVAC professionals, and take the first step towards a more energy-efficient and environmentally conscious home today.

Qualifying for tax credit:

To qualify for the current federal tax credit of up to $2,000 for an HVAC system, the system must meet specific requirements outlined by the Internal Revenue Service (IRS). Here are the general requirements:

Efficiency Ratings:

The HVAC system must have specific energy efficiency ratings, which vary depending on the type of equipment. For heating and cooling equipment, such as air conditioners and heat pumps, they must meet or exceed the following ratings:

  • Air Conditioners: Seasonal Energy Efficiency Ratio (SEER) of 16 or higher

  • Heat Pumps: SEER of 15 or higher, and Heating Seasonal Performance Factor (HSPF) of 8.5 or higher

  • Main Home: The HVAC system must be installed in the taxpayer's main residence, which can include houses, apartments, condos, and manufactured homes. Second homes and rental properties are generally not eligible.


The HVAC system must be installed between specific dates designated by the federal government. The tax credits are usually available for a limited period, and installations outside of this timeframe may not qualify.

Manufacturer's Certification:

The taxpayer should obtain a manufacturer's certification statement that confirms the HVAC system's eligibility for the tax credit. This certification statement should be kept for documentation purposes during tax filing.

Tax Liability:

It's important to note that the tax credit is non-refundable, meaning it can reduce your tax liability but cannot exceed the amount of taxes you owe. Therefore, the credit can help offset the taxes you owe up to the maximum amount specified.

It's crucial to consult the IRS guidelines and instructions or speak with a tax professional to ensure accurate information and determine your eligibility for the federal tax credit.