Thanks to the Inflation Reduction Act (IRA), upgrading to an energy-efficient heat pump is now more affordable than ever. With up to $8,000 in point-of-sale rebates and additional tax credits under Section 25C of the tax code, heat pumps are having a moment—and homeowners across the country are cashing in.
Not sure what the difference is between rebates and tax credits? We break it down for you here and explain how to stack and braid both savings for maximum benefit. The bottom line: Heat pumps are eligible for both incentives, and with some know-how, you could cover most (or even all) of the cost.
But before you start shopping, there’s one big question:
What heat pumps actually qualify for IRA rebates? Let’s get into it.
First Things First: What Is a Qualifying Heat Pump?
Not all heat pumps are created equal, and not all will qualify for federal tax credits and rebates. To access the IRA incentives, your new heat pump must meet specific efficiency requirements and be certified by ENERGY STAR.
Here’s what the government is looking for in a qualifying unit:
- ENERGY STAR Certification: This is the baseline. If the unit isn’t ENERGY STAR certified, it’s not eligible. Full stop.
- Efficiency Ratings: For air-source heat pumps, the system must meet the highest tier of efficiency as defined by the Consortium for Energy Efficiency (CEE). This means:
- SEER2 (Seasonal Energy Efficiency Ratio): 15.2 or higher
- EER2 (Energy Efficiency Ratio): 11.7 or higher
- HSPF2 (Heating Seasonal Performance Factor): 7.8 or higher
The good news? There are plenty of models on the market that meet or exceed these standards. You just have to know what to look for—and MyNewHeatPump can help with that.
Does the Heat Pump Have to Replace Your Existing System?
Here’s a question we get a lot:
Can I keep my furnace or boiler and still qualify for rebates or tax credits?
Short answer: Yes.
Longer answer: As long as the new heat pump supplies at least 51% of your home’s heating or cooling load (measured in BTUs), you’re in the clear.
That means you can still have a gas furnace as a backup or part of a dual-fuel system, so long as your heat pump is sized to be the primary heating source for your home.
This flexibility makes it easier for homeowners in colder climates to qualify, since many already rely on backup heating in extreme winter months.
Types of Heat Pumps That Qualify
There are a few types of heat pumps that may qualify under the IRA. Here’s a breakdown:
1. Air-Source Heat Pumps (ASHP)
These are the most common type and usually the easiest to install. Modern ASHPs are highly efficient and can both heat and cool your home.
Most ENERGY STAR air-source heat pumps will qualify, as long as they meet the CEE Tier 1 efficiency standards.
2. Ductless Mini-Split Heat Pumps
Ideal for homes without central ductwork, mini-splits are a flexible and efficient solution. Good news—they’re also covered.
Make sure the outdoor compressor unit and each indoor head meet ENERGY STAR and efficiency requirements.
3. Ground-Source (Geothermal) Heat Pumps
Though more expensive up front, geothermal systems offer exceptional efficiency and long-term savings. These are covered under a separate 30% tax credit, but not eligible for HEEHRA point-of-sale rebates.
These systems must meet ENERGY STAR guidelines to qualify for tax incentives.
4. Cold-Climate Heat Pumps
Specially designed to function efficiently in sub-freezing temperatures, these are essential for northern states. Many cold-climate heat pumps meet the requirements for IRA programs.
Look for models listed in the Northeast Energy Efficiency Partnership (NEEP) cold-climate heat pump directory.
What About Installation?
To qualify for IRA incentives, heat pumps must be installed by a licensed, state-qualified contractor. This ensures:
- Proper sizing
- Correct refrigerant handling
- Local code compliance
- Documentation for tax filing or rebate processing
👉 If you go through MyNewHeatPump.com, we’ll connect you with vetted local contractors who meet every requirement and help you collect every dollar you’re eligible for.
How to Know If Your Heat Pump Qualifies
We don’t expect homeowners to be efficiency code experts (that’s our job). Here’s what you should do instead:
- Start with our quick eligibility form: We’ll gather basic info about your home and current system.
- Get matched with local contractors: We only work with contractors who install qualifying equipment.
- Let us handle the rebate paperwork: You get the savings, we take care of the stress.
Still Curious? Common FAQs About Qualifying Heat Pumps
Do all ENERGY STAR heat pumps qualify for IRA rebates?
Not necessarily. While ENERGY STAR certification is the first requirement, the unit must also meet higher efficiency standards defined by the Consortium for Energy Efficiency (CEE) Tier 1 or higher, specifically in terms of SEER2, EER2, and HSPF2 ratings.
So before you purchase, it’s essential to double-check that the system qualifies under both ENERGY STAR and CEE criteria.
What happens if I already bought a heat pump? Can I still get money back?
If your heat pump was purchased and installed on or after January 1, 2023, and it meets the efficiency requirements, you may be eligible for the 25C tax credit.
Rebates are a bit trickier—they depend on income qualification and state program rollout, but you could still qualify for incentives depending on your situation. Our team can help you navigate the entire process with ease.
How do I claim the tax credit for new appliances?
To claim the 25C tax credit, you’ll need to file IRS Form 5695 with your federal tax return. This form reports your qualified energy-efficient home improvements, like heat pumps, and helps calculate your credit.
If you’re unsure where to start, MyNewHeatPump.com can help guide you through the process and ensure you have the proper documentation.
Get the Right Heat Pump—and the Right Support
Choosing a qualifying heat pump is step one. But navigating the maze of rebates, tax credits, and efficiency codes? That’s where MyNewHeatPump.com steps in.
We don’t just help you install a heat pump—we help you install the right one, submit the right paperwork, and claim the right incentives. From quote to install to rebate check, we’ve got you.
Unlock Up to $14,000 in Rebates & Tax Credits at MyNewHeatPump.com
MyNewHeatPump.com can help you find qualifying systems, stack available incentives, and connect with certified installers. Don’t leave rebate money on the table—take our free eligibility quiz today!
