HVAC REBATES AND TAX INCENTIVES FOR ENERGY EFFICIENT UPGRADES IN OHIO

November 30, 2023

Thanks to the Inflation Reduction Act of 2022 (the IRA), there’s never been a better time to invest in home improvement.

Here’s why: The Inflation Reduction Act can save you money while you upgrade your home, and you don’t want to miss out on these savings.

As the year ends, we’re here to remind you that you should consider making energy-efficient upgrades that can qualify you for HVAC rebates. If you act before the year ends, you may be able to claim specific upgrades on your tax filings—and save up to $3,200.

UNDERSTANDING THE INFLATION REDUCTION ACT

The Inflation Reduction Act (IRA) was signed into law in 2022 to provide homeowners with incentives to improve home energy efficiency and make homes more environmentally friendly. These federal incentives come in the form of rebates and tax credits.

Here are some highlights:

The new law provides federal rebates for HVAC upgrades and other tax credits for eligible homeowners who make energy-efficient home improvements.
The tax credits include qualifying energy-efficient HVAC systems, heat pump water heaters, geothermal heating installation, insulation improvements, and some high efficiency water heaters.  
Homeowners can claim tax credits of 30% of the costs for the upgrades, up to $3,200 for making qualified energy-efficient home improvements.
The law empowers you to improve your energy use and save while helping boost energy efficiency.
Homeowners can take advantage of the credit every year through 2023 to make upgrades, as it resets annually.

WHAT ARE ENERGY REBATES AND TAX INCENTIVES?

An energy rebate is a financial incentive that encourages homeowners to make energy-efficient upgrades to their homes by offering a cash return or discount for making specific home improvements or installing specific types of equipment.

In the case of the IRA, a tax incentive is a government measure that reduces the tax burden for homeowners, encouraging them to make energy-efficient changes and upgrades to their primary residence. Tax incentives can take the form of exemptions, deductions, credits, and rebates.

HVAC REBATES AND TAX INCENTIVES IN OHIO?

Since the IRA is a federal act for all US homeowners, every rebate and incentive is available to Ohio homeowners. But, the specific program runs through a state-by-state program implementation and approval process.

Ohio was awarded $249 million by the US Department of Energy (DOE) through the IRA. This breaks down as the following:

$124,628,229 toward Home Efficiency Rebates (HOMES)
$124,150,970 from the High-Efficiency Electric Home Rebate Act (HEEHRA)

Talk to the experts at Columbus Worthington Air about your energy-efficient HVAC options. Call 614-405-7819.

UPGRADE NOW & SAVE AT TAX TIME

Water heater giving you the cold shoulder? HVAC system cycling on and off? If you’re facing any major repairs, or you’ve noticed utility bills rising just to keep the temperature the same in your home, now’s the time to consider taking advantage of rebates for energy-efficient HVAC to upgrade that outdated system to a more energy-efficient model.

The IRA provides annual rebates and tax incentives for all of the following:

Heat pumps for heating and cooling
Some high efficiency AC/furnace units
Water heaters
Biomass stoves
Advanced main air circulating fans
Insulation
Natural gas, propane, or oil furnace or hot water boiler with an AFUE of at least 95
Certain types of air-source and ground-source heat pumps
Certain types of biomass-fueled boilers, and certain types of circulating fans for natural gas furnaces

WHAT REBATES AND INCENTIVES ARE AVAILABLE IN OHIO?

There are two main categories of improvements to take advantage of when improving your home’s energy efficiency and reducing energy costs in Ohio. Homeowners who make upgrades to their primary residence and have a tax liability in the same year can claim IRA tax credits for up to $3,200 in these categories:

General energy-efficient home improvement: Annual limit of $1,200 for improvements to windows, doors, insulation, and certain HVAC systems
Heat pumps and biomass stoves: Annual limit of $2,000

To claim these credits, homeowners will use the IRS Form 5695.

The $3,200 tax credit can be used annually for eligible projects. For tips on grouping projects in different years, see "Strategies to Maximize Your Federal Tax Savings" on the Federal Tax Credits for Energy Efficiency website.

Here’s how the different incentives break down for heating upgrades, cooling upgrades, and other home upgrades:

HEATING REBATES

Water heaters: Tax credit of 30% with a cap of $1,200

Biomass stoves: Tax credit of 30% with a cap of $300

Geothermal heat pumps: Tax credit of 30% with a cap of $2,000

Heat pumps: Tax credit of 30% with a cap of $2,000

COOLING REBATES

Air conditioning: Tax credit of 30% with a cap of $1,200

HOME UPGRADES

Insulation: Tax credit of 30% with a cap of $1,200

Windows and doors: Tax credit of 30% with a cap of $1,200

WHAT SEER RATING IS REQUIRED FOR A TAX CREDIT IN OHIO?

The seasonal energy efficiency ratio (SEER) rating measures the energy efficiency of air conditioning and heat pump systems.

Ohio is designated as the “North Region” for minimum SEER guidelines, which require the following SEER ratings:

13.4 SEER2 (equivalent to 14.0 SEER) for an air conditioner

14.3 SEER2 (15.0 SEER) and 7.5 HSPF2 (8.8 HSPF) for a heat pump

81% AFUE for gas furnaces

The higher the SEER rating, the lower the energy costs and environmental footprint.

Columbus Worthington Air IS HERE TO HELP!

We understand that the new IRA law and its associated tax credits can be confusing. For this reason, a great deal of misleading information is floating on the web. When you have questions, remember that the team at CWA is just a phone call away.

As you consider replacing your current system, our advisors can help you understand which systems are eligible for tax credits under the new law. We will also work with you to replace your system by the end of the year so you can benefit from a 2024 tax credit.

(Note: While we can provide information about what equipment is eligible, keep in mind that CWA is not a licensed tax professional. We recommend consulting with a tax advisor for any in-depth tax credit queries.)

At CWA, we are committed to helping our customers experience true indoor comfort while staying within budget. This is why we highly suggest taking full advantage of the new IRA tax credit before the end of this year.

HOW TO QUALIFY FOR IRA INCENTIVES IN OHIO

To qualify for IRA incentives, you have to make improvements to your primary residence in the US focused on making your home more energy efficient. This can include installing eligible new windows, doors, insulation, and HVAC systems.

Call 614-405-7819 to talk to one of our experts today to discuss your options for HVAC systems that qualify for IRA deductions you can take advantage of for the 2024 tax season.

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