When considering HVAC upgrades for your home, there are major tax incentives available to save you money on your new systems. The specific incentives can vary — so read on to learn more about how you can maximize your savings!

What Is Tax Credit (25C)?

Property tax concept illustration

In August 2022, the U.S. government enacted the Inflation Reduction Act (IRA) as part of a strategy to decrease greenhouse gas (GHG) emissions by 40% before 2030. This is where the Energy Efficient Home Improvement Tax Credit (25C) comes into play.

This tax credit makes right now the ideal time to invest in a qualified HVAC system for unmatched energy savings, performance, and comfort. Here at, Northwest HVAC Heating & Cooling, we offer a diverse range of products that meet ENERGY STAR® qualifications that are eligible for this tax credit.

Ready to save on initial installation costs and create long-term savings? Read on to learn how much you can save, what systems are considered, how to apply, and more!

How Much Can I Save?

Tax Credit Amount

Eligible Products

Up to



Heat pump
Heat pump water heaters

Up to



for other energy savings

Electrical Panel
Energy Audit

Up to



Total Credit

What Systems Are Considered?

  • Electric or natural gas heat pumps
  • Electric or natural gas heat pump water heaters
  • Biomass stoves and boilers
  • Central air conditioners
  • Natural gas, propane, or oil water heaters
  • Natural gas, propane, or oil furnaces and hot water boilers

When looking for guidance on choosing a qualified system and the best choice for your home, ask our team at Northwest HVAC Heating & Cooling for more information.

It’s essential to note that the selected HVAC appliance must meet the highest efficiency standards prevailing at the time of claiming the credit. Look for the ENERGY STAR certification on the label for most of these systems, ensuring they adhere to stringent efficiency criteria.

Frequently Asked Questions:

  • How Long is the Tax Credit Effective? The tax credit is effective for products purchased and installed between January 1, 2023, and December 31, 2032.
  • Who Qualifies For Tax Credit 25c? Any homeowner living in a pre-existing home (new builds do not qualify!) can qualify for this tax credit.
  • Is The Tax Credit Refundable? No, it is not refundable, which means it can only be used to reduce the amount of taxes you owe.

What Are My Next Steps?

Step 1:

Install qualifying upgrades in your existing home (our team of experts will make sure it qualifies!)

Step 2:

Hold onto all receipts and documentation related to the upgrades. Detail what was installed, who performed the installation, and the associated costs. This will significantly streamline the filing process.

Step 3:

File an IRS Form 5695 with your tax return to deduct the amount of credit from the taxes you owe. It’s advisable to call an accountant to ensure correct filing.

Find it here!

Secure Your Credits & Enhance Comfort

Every home is different and needs a personalized solution that cannot be solely decided on by reading any online article. Turn to our professionals at Northwest HVAC Heating & Cooling and we will help you find the perfect energy and cost-saving solution for your home! We’re here to help you make the most of your investment while enjoying a comfortable and environmentally conscious space.

For any questions or to initiate your energy-efficient upgrade, feel free to contact us today!

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