Heat pump federal tax credit 2023

Starting in 2023 through the end of 2032, all homeowners will be eligible for a 30% federal tax credit on the total cost of buying and installing their new heat pump, with a maximum credit of $2,000.

The High-Efficiency Electric Home Rebate Act — part of the The Inflation Reduction Act — can also help you offset the cost of purchasing a heat pump — depending on your income.

You could be eligible for up to $1,750 for a heat-pump water heater and $8,000 for a heat pump for space heating if your household income is less than 150% of your state’s median income.