What To Know About 2025 Federal Tax Credits & Rebates for Air Conditioners

While upgrading your cooling equipment can help strengthen indoor comfort and improve energy efficiency, AC replacements can strain many families’ finances. However, due to the Inflation Reduction Act (IRA) of 2022, Murfreesboro residents have access to expanded federal tax credits and rebates for all types of energy-efficient appliance upgrades, including air conditioners.

Below, the cooling experts at Parker’s Heating & Cooling provide a comprehensive overview of available federal tax credits and rebate programs to help you save on your AC upgrade.

How Much Can You Get Back in Tax Credits for Upgrading Your HVAC?

Under the IRA, homeowners may qualify for federal tax credits for installing brand-new HVAC systems that meet the Consortium for Energy Efficiency (CEE) highest efficiency tier. Families who install a qualifying air conditioner may be eligible to receive up to 30% of the cost of their installation costs back in tax credits at the time of their income tax filing. For central air conditioners, the tax credit is capped at $600. So, if you upgrade your cooling system to a more energy-efficient version, you may receive up to 30% of the installation cost or $600 in tax credits — whichever is less.

To qualify for the tax credit, homeowners must install their air conditioning systems in a primary residence in the U.S. The residence cannot be newly constructed or used primarily for business purposes to be eligible for the tax credit. However, if your home is used as a business 20% of the time or less, you may still be eligible to receive a tax credit.

Are There Any Additional Rebates Available?

If you want to make more comprehensive energy-efficiency upgrades to your home, the HOMES rebate program may be what you need. Through this program, homeowners may receive up to $2,000 (or 30% of the cost of their replacement) for installing eco-friendly models in their properties.

This program especially benefits those interested in upgrading from a central air conditioner to a heat pump system. A maximum tax credit of 30% of costs up to $2,000 applies for any heat pump installations made between January 1, 2023, to December 31, 2032.

Remember: To qualify for tax credits or rebates, you must file Form 5695, Residential Energy Credits Part II, with your tax return. Consult with your tax professional to ensure you satisfy all the eligibility criteria before filing.

Choose Parker’s To Schedule Your New Cooling System Installation & Save Money!

Are you considering upgrading your cooling equipment while taking advantage of available tax credits and rebates? Parker’s Heating & Cooling can help. Our team is well-versed in all federal, state, and local tax incentives and rebate programs, helping our customers find the best systems for their specific needs while satisfying the eligibility criteria needed to receive the maximum rebate amount. With regular coupons and specials and flexible financing solutions, we help drive down the cost of your energy-efficient upgrades even more, making your AC installation project as affordable and stress-free as possible every step of the way.

Don’t put off your cooling system upgrade any longer. Call [site_info_phone_number] today to book an AC installation in Murfreesboro, TN!