Upgrade & Save: How To Cut HVAC Costs With The Inflation Reduction Act
March 27, 2025
If you’re a homeowner in Iowa, you may be unknowingly sitting on thousands of dollars of savings on upgrades for your home HVAC system. And even worse, you’ve missed out on these savings since 2023. This is when the Inflation Reduction Act of 2022 implemented the Energy Efficient Home Improvement Credit that allows homeowners to receive up to $3,200 from their tax return for eligible energy-efficient HVAC improvements. The good news? You can still claim this tax credit every year from now until 2032 for qualified energy-efficient purchases and home upgrades you make in the corresponding tax year. Even better news: taking steps to make your home more energy efficient today will continue to benefit you well into the future by cutting costs on your energy bills.
How The Energy Efficient Home Improvement Credit Benefits Iowa Homeowners
One day, Iowa weather is too hot. The next, it’s too cold. Rarely is it just right. Whether or not your home has an energy-efficient HVAC system might not be top-of-mind when you’re constantly on your toes waiting for what the new day will bring. But with the new HVAC tax credit promising savings of up to 30% on qualified HVAC purchases and home improvements annually, you’ll want to think twice about your HVAC system’s ability to keep up. After all, home HVAC systems are one of the biggest consumers of energy in your home. Discover how to take advantage of the Energy Efficient Home Improvement Credit while it’s available to maximize energy efficiency while minimizing the impact on your wallet.
Who Can Qualify For The Tax Credit For New HVAC Systems?
Any homeowner is eligible to receive a tax credit for a new, qualified energy-efficient HVAC system so long as they’re purchasing the upgrade for their primary residence, and the primary residence is an existing property, not newly constructed. The credit isn’t available for landlords or property owners who don’t reside in the home.
However, the credit isn’t as much about “who” is eligible but rather “what” is eligible. So long as you meet the criteria above, your main concern should be ensuring any new HVAC purchases or home improvements qualify as energy efficient. HVAC purchases may include central air conditioning units, water heaters, boilers and heat pumps, all of which must be recognized in the highest efficiency tier of the Consortium for Energy Efficiency to qualify. Home improvement projects that prioritize energy efficiency—updating windows, doors and insulation, to name a few—may also qualify, but only if they meet certain Energy Star or International Energy Conservation Code requirements, respectively. Learn more about eligibility for the Energy Efficient Home Improvement Credit on the IRS website.
How Much Money Can You Save With An Energy-Efficient HVAC?
Under the Inflation Reduction Act, homeowners can claim up to $3,200 in tax credits per year through 2032. When you upgrade your home’s heating and cooling system to a qualifying energy-efficient HVAC unit, you can claim up to the maximum of $2,600 for eligible products. Other qualifying projects like a home energy audit or insulation updates can count toward the remaining credit to get up to $3,200 each year. Depending on your purchases or projects, the amount you’re eligible to claim will vary each year, but if you plan ahead, you can continue to make qualified upgrades to your home and maximize the payout you’re eligible for each year.
Keep in mind that as a tax credit, you’ll only receive the credited amount if you owe at least that much money on your tax return. If you owe less than your credited amount, you’ll get back however much you owe.
And the savings above only represent what’s possible with the Energy Efficient Home Improvement Credit. This doesn’t count all of the energy savings that come with installing more efficient equipment in your home. The opportunity to save on energy and HVAC costs long-term is value you can’t beat. Learn more about savings for eligible products at EnergyStar.Gov.
How Can You Claim The Energy Efficient Home Improvement Credit?
Once you’ve determined your new HVAC purchase or home improvement project is eligible for the tax credit, you must file IRS Form 5695 with your tax return to receive the credit. The projects and purchases you’re claiming must have been installed during that tax year to earn the credit. To cover your bases, save any relevant receipts or records related to the product or project so you have materials to supply in the event your tax return is audited. Work with a tax professional to ensure you have everything you need to receive the credit. View additional resources to get started:
How To Maximize Savings With Your Energy-Efficient HVAC System
Tax credits are just one way you can save big on new HVAC purchases. Depending on the manufacturer, products like air conditioners and furnaces often come with rebates where customers get a portion of their money back for a discount after-the-fact. If you receive a rebate for an eligible energy-efficient HVAC, you can still apply for the Energy Efficient Home Improvement Credit. For tax purposes, your credit earned will be calculated based on the final amount you paid for the product once the rebate was applied. Stack savings with rebates and tax credits at your disposal.
You can also look into loyalty rewards programs offered by your local HVAC service provider for the potential to earn ongoing savings for maintenance, repairs and new purchases. Lozier Heating & Cooling is proud to offer seasonal tune-ups, 15% off repair parts and filters and up to $1,000 off a new heating or cooling system to local reward members in Des Moines. With the right provider and the right products, you can take your home’s energy efficiency to new heights, improving performance, lowering energy bills and reducing maintenance costs.
Take Advantage Of The Inflation Reduction Act In Iowa With A New Energy-Efficient HVAC System From Lozier
For energy-efficient HVAC systems you can trust, look no further than Lozier Heating & Cooling. Our certified team helps homeowners save on energy costs with high-efficiency products and top-quality customer service across the Des Moines metro. Take advantage of the Inflation Reduction Act Energy Efficient Home Improvement Credit with Lozier’s local expertise and vast product offerings here in Iowa. Contact our team online, call (515) 267-1000 or text (515) 393-4262 to upgrade and save with Lozier today!