Tax Credits
The Inflation Reduction Act (IRA) provides a tremendous opportunity for homeowners to switch to heat pumps and other clean, efficient energy solutions by offering significant federal income tax credits, available through 2025.
These tax credits can be combined with NYS Clean Heat rebates, low-interest financing, and State tax credits, making heat pumps more affordable than ever before.
The tables below summarize available tax credits and incentives for different types of heat pumps as well as related improvements you might consider along with heat pumps, such as electric panel upgrades and home weatherization measures.
Tax Credits and Incentives for Clean Heating, Cooling, and Water Heating
| Eligible Clean Energy Technology | New York State Incentives and Tax Credits |
|---|---|
| Cold-climate Air Source Heat Pumps |
NYS Clean Heat incentives for partial home solutions: $100-$400, on average NYS Clean Heat incentives for whole home solutions: $2,000-$3,000, on average |
| Geothermal (Ground Source) Heat Pumps |
NYS Clean Heat incentives: $7,000-$9,000, on average NYS Tax Credit: 25% of cost, up to $5,000 |
| Heat Pump (Hybrid) Water Heaters |
NYS Clean Heat incentives: $700-$1,000, on average |
NYS Clean Heat incentive amounts may vary depending on your location and electric utility. Click on Find Available Rebates to see which incentives you are eligible for.
Other Important Considerations
- Not all equipment is eligible for tax credits or incentives. Work with your contractor to select qualifying equipment.
- Equipment purchased and installed will be eligible for federal tax credits during the next tax season. For example, if you install a heat pump in 2023, you can apply for tax credits when you file your taxes in 2024.