When the Inflation Reduction Act (IRA) passed, it wasn’t just about fighting climate change. It was also about helping everyday homeowners afford smarter, more efficient upgrades, like switching to a heat pump without breaking the bank.
With as much as $14,000 in point-of-sale incentives on the table, the IRA makes switching to energy-efficient appliances like heat pumps a whole lot more affordable.
But here’s the catch: these rebates are income-based. Not everyone qualifies for the full amount, and figuring out what you qualify for can feel like decoding a riddle written by your tax guy after too much coffee.
Let’s simplify it.
The Basics: What Are the Income Limits for the IRA?
The IRA rebate programs are designed to offer larger rebates to those who need them most. That means your eligibility depends on how your household income compares to your Area Median Income (AMI).
There are three income tiers that determine your rebate amount:
- Low-Income (≤80% of AMI): You’re eligible for 100% of the rebate amount, up to the program caps.
- Moderate-Income (81–150% of AMI): You qualify for 50% of the rebate amount.
- High-Income (>150% of AMI): Unfortunately, you’re not eligible for these point-of-sale rebates, but tax credits may still apply.
What is AMI?
Think of it as the middle point of incomes in your area. It changes depending on where you live and how many people are in your household.
Let’s break it down with an example:
| Household Size | 80% AMI (Low) | 150% AMI (Moderate) |
| 1 person | ~$52,000 | ~$98,000 |
| 4 people | ~$74,000 | ~$140,000 |
(Exact numbers vary by location—this is just an example.)
If you’re below the low-income threshold, you could be eligible for up to $8,000 toward a heat pump, $1,750 for a heat pump water heater, and thousands more for electric panels, wiring, and insulation.
Shortcut Alert: Do You Automatically Qualify for IRA Rebates?
Here’s the good news—some people are considered low-income by default and automatically qualify for full rebates, no income verification required. If anyone in your household is enrolled in one or more of these programs, you’re likely eligible for 100% of the rebate value:
✅ Medicaid
✅ Supplemental Nutrition Assistance Program (SNAP)
✅ Supplemental Security Income (SSI)
✅ Section 8 Housing Assistance
✅ Free or Reduced School Lunch
✅ Veterans or Tribal Assistance Programs
This is a huge deal, especially because you don’t have to dig up tax documents or calculate your AMI. Just prove you’re enrolled in one of these and you’re good to go.
But What If You’re “Close” to the Line?
If your income is hovering near the thresholds, don’t stress. That’s where MyNewHeatPump comes in. We help homeowners:
- Check AMI for their zip code
- Identify what rebates apply to their household size and income
- Determine if they can stack additional state and utility rebates
- Maximize their 25C tax credit if they’re not eligible for point-of-sale options
Our rebate experts know how to weave together federal, state, and utility incentives to cover the biggest portion of your project. If there’s money on the table, we’re grabbing it for you. Plus, AMI limits are updated every year, so if you’re just over the threshold now, you might qualify next April when the new numbers come out.
Common Questions About Heat Pump Rebates
What if IRA rebates don’t cover the full cost of a heat pump?
No problem—you can still save big. If your rebates only cover part of the cost, you may be eligible to claim the 25C % federal tax credit on whatever you paid out-of-pocket. This credit covers 30% of your remaining expenses, up to $2,000, and can be combined with rebates to reduce your total cost significantly.
And if you still need help covering the rest, MyNewHeatPump can connect qualifying homeowners with flexible financing options to keep your project moving forward without the financial stress.
What if I have already installed my heat pump? Can I still get a rebate or tax credit?
That depends on the timing and the type of incentive. If your heat pump was installed on or after January 1, 2023, and meets the qualifying criteria, you can still claim the 25C tax credit using IRS Form 5695.
Rebates are a bit trickier. They’re typically point-of-sale discounts and require pre-approval, so retroactive rebate claims usually aren’t allowed unless your state explicitly offers them (which is rare).
Are IRA rebates available in every state?
Not yet. While some states have launched their programs and are actively accepting rebate applications, others are still building out their systems or finalizing eligibility rules. That’s where MyNewHeatPump comes in.
We’re tracking each state’s rollout in real time and can tell you exactly what rebates are live in your area, what’s coming soon, and how to get in line early.
Do I need to replace my existing HVAC system to qualify for the rebate?
No, not always. You can keep your existing system as long as the new heat pump you install is capable of handling at least 51% of your home’s heating and cooling needs.
This allows the heat pump to be considered the primary system, which is a key requirement for rebate eligibility. It’s a great option for homeowners who want to supplement their current setup without a full system replacement.
What paperwork do I need to apply for IRA heat pump rebates?
Most rebate programs will require proof of income eligibility, equipment specifications (like SEER2 or ENERGY STAR certification), and documentation from a qualified contractor.
Some states also ask for geotagged installation photos and pre-approval before purchase. Don’t worry—MyNewHeatPump can handle the paperwork for you and walk you through every step so nothing gets missed.
What About IRA Rebates for Multifamily Households?
Glad you asked. AMI-based limits apply to each household, not the whole building. So, if you live in a duplex, condo, or apartment and your household income meets the guidelines, you still qualify just like a single-family home.
Some programs even include multifamily-specific rebates or additional utility incentives for building-wide improvements. Another reason to work with experts who know the rebate landscape inside and out.
The Bottom Line: IRA Rebates Work for Homeowners, Landlords, & Multifamily Properties
The IRA rebates were designed to help more Americans make smart, energy-saving upgrades without the financial burden. And while the income rules may seem complicated at first, they’re actually a great tool for making home improvements more equitable.
But the real secret to getting the most out of them? Work with a partner who understands how to unlock every dollar.
MyNewHeatPump Makes It Simple.
We help you:
✔ Confirm eligibility
✔ Navigate your state’s program
✔ Stack local incentives
✔ Submit all paperwork (even the IRS Form 5695 for tax credits!)
✔ Get your project moving—without wasting time or money
Access Up to $14,000 in Rebates with MyNewHeatPump.com
Let our team help you cut through the red tape and cash in on the rebates and tax credits you actually qualify for. Check your eligibility now and get expert guidance every step of the way.
