
Federal Tax Credits and Rebates for Home Upgrades: Everything You Need to Know
If you upgrade your home’s heating and cooling appliances without knowing the available tax credits, you leave money on the table. The recent Inflation Reduction Act of 2022 (IRA) provides several credits from the federal government to reduce your tax bill for eligible upgrades.
Learn about the IRA and other tax credits and incentives for home improvements, how they can save you money at tax filing time, and how to determine your eligibility.
Understanding the Inflation Reduction Act
President Biden signed the Inflation Reduction Act in 2022, encompassing legislation that reduced prescription drug prices, extended some of the Affordable Care Act, and implemented funding for climate initiatives, including tax credits and rebates for homeowners.
The IRA includes specific tax credits and rebates for homeowners who install new HVAC systems or upgrade their current systems, such as heat pumps. However, there are eligibility requirements and limits.
25C Energy Efficient Home Improvement Credit
The 25C Energy Efficient Home Improvement Credit offers tax credits for qualified energy-efficient improvements to your home. Starting January 1, 2023, homeowners may qualify for a tax credit of up to $3,200 for upgrades made through December 31, 2032.
25C can equal up to 30% of certain eligible expenses, including:
- Qualified energy efficiency improvements installed during the year
- Residential energy property expenses
- Home energy audits
However, the allowable annual credit and the credit for certain types of qualified expenses have limits, which can be confusing.
There’s a maximum allowable credit for each year:
- $1,200 for energy property costs and specific energy-efficient home improvements with a limit of $250 per door, $600 for whole-house window installations, and $150 for energy audits.
- $2,000 annually for qualified heat pumps and biomass stoves, boilers, and ENERGY STAR® air conditioners.
While there are limitations, you can claim the maximum annual credit each year that you’ve made eligible improvements through the end of the 2032 tax year. The credit resets yearly, so you can use it repeatedly for qualifying energy upgrades.
Note that this is a tax credit, which means it’s an amount you can subtract from your tax liability (the taxes you owe). A tax credit only applies if you owe taxes at the end of the year. It’s not a deduction or a refund. You can’t apply the extra amount to a future tax year if there’s a higher credit than your tax liability.
Which Upgrades Are Eligible?
To be eligible, you must be a taxpayer living in a home or apartment and purchase or install the upgrades. The credit only applies to upgrades on existing primary homes, not secondary properties—like rentals—or new construction.
So, if you’re a landlord, you can’t make energy-efficient upgrades to your vacation home or rental properties and take the tax credit. However, different tax credits may apply to upgrades for second homes.
Eligible appliance upgrades include:
- Insulation and air sealing (weatherization): This includes the supplies used to insulate and seal your home against air leaks, such as insulation bats, expanding spray foam insulation, and sealants. According to the Department of Energy, weatherization upgrades have to meet the recommended R-values for your climate zone to be eligible for the upgrade.
- Energy-efficient windows and doors: You can replace your exterior doors and windows with ENERGY STAR® certified doors and windows, but there are limits. You can spend up to $600 of the credit on windows, $500 on doors, and no more than $250 on one door.
- Heating, cooling, and water heating systems: Central air conditioning, heat pumps, and heat pump water heaters (HPWHs) may also be included. Gas, propane, or oil furnaces and water boilers may also be included.
- Energy audits: Energy audits are assessments that determine where you’re losing energy and how to optimize your home for maximum energy efficiency with tailored solutions. This is an important step in determining the best way to maximize your spending on upgrades, and you can apply $150 of your credit toward a professional audit.
Remember to upgrade HVAC appliances that meet the highest energy efficiency standards, which generally means ENERGY STAR® certified appliances.
How to Apply for 25C Tax Credit
Getting a 25C properly credited to your taxes can be complicated, so working with a tax professional is best. The general process includes:
- Install qualifying upgrades to your home.
- Keep your receipts and documentation for the upgrades. Include what you purchased and installed, who installed it, and how much it cost. Retain copies for your records.
- Tell your tax professional you plan to use the 25C tax credit. This can help you plan your tax filing.
25C tax credits are filed using IRS Form 5695.
Rebate Programs
Tax credits like 25C require taxes owed for homeowners to cash in, but it doesn’t matter if you owe or get a refund to take advantage of tax rebates. Here are some rebate programs for homeowner energy-efficiency upgrades:
Home Energy Performance-Based, Whole House Rebate (HOMES) Rebate Program
The Home Energy Performance-Based, Whole House Rebate (HOMES) Rebate program is intended to help homeowners save on energy bills with point-of-sale rebates for eligible home weatherization and electrification improvements. Some eligible rebates include air sealing, insulation, heat pump HVAC systems, and HPWHs, which you’ll receive when you purchase.
For example, a qualifying rebate would replace a dated HVAC system with a mini-split heat pump system. Homeowners can claim up to $2,000—or 30% of the cost—toward purchasing and installing the heat pump and any necessary electrical upgrades.
State-based programs under HOMES offer low- and moderate-income households rebates of up to $8,000 on heat pump installation and $4,000 on electrical upgrades.
Home Electrification and Appliance Rebate (HEAR)
The Home Electrification and Appliance Rebate (HEAR) incentive program is a $4.3 billion program part of IRA that assists homeowners with rebates at the time of sale, not with a mail-in rebate or a rebate at tax time. Instead, the rebate is applied at purchase, offering $8,000 to lower the purchase price for heat pumps used for home heating and cooling.
In addition to heat pumps, heat pump HVAC systems, and HPWHs, the program may include qualified electrification programs like electric stoves and cooktops, air sealing and insulation, wiring and ventilation, and some purchase and installation costs.
Like HOMES, HEAR is intended for low—to moderate-income homeowners. If your income falls below 80% of the median income in your area, the program may cover up to 100% of the electrification costs. If your income falls between 80% and 150% of your area’s median income, you may receive up to 50% of the costs. Both programs are capped at $14,000.
HOMES and HEAR can vary based on household income, the type of upgrade and its efficiency, and your state’s rules and requirements. The specifics are up to each state and may be first come, first serve, or random, so it’s best to plan early to get your rebates when the programs are implemented in your state.
How to Maximize Your Tax Credit
Though it flew under the radar, the IRA and 25C tax credits and the energy-efficiency rebates greatly expanded the benefits for eligible homeowners. The credits and rebates do have qualifying appliances and limits, so it’s best to plan your upgrades to ensure you get the most out of them.
- Make sure your home is airtight. Air leaks and damaged insulation are responsible for up to 45% of energy waste in your home. There’s little point in upgrading to a new energy-efficient HVAC system if you only lose your heated or cooled air from leaks.
- Upgrade your HVAC to an energy-efficient heat pump. These systems are far more energy-efficient than conventional ones and can replace heating and air conditioning in one unit. Heat pumps also dehumidify and filter your home and work with existing ductwork. If you prefer ductless, heat pumps can provide zoned heating for more personalized comfort. Heat pumps can have high upfront costs, but with the available tax credit, now is the time to upgrade.
- Look into state incentives and rebates. IRA is a federal program, but individual states may offer additional incentives and rebates that you can combine with federal incentives. Consider your options and plan your upgrade strategy with a tax professional and an HVAC professional to maximize the savings.
Upgrade Your Home with Energy-Efficient Appliances for Energy and Tax Savings
With sweeping legislation like the IRA and 25C tax credit, now’s the time to upgrade your home’s appliances to enjoy a tax break and long-lasting energy efficiency savings.
Are you unsure what’s best for you? Goettl Air Conditioning can help! Contact us to discuss your home’s energy-efficient upgrades!
The factual information regarding IRA 25C and 3C-REN programs is for educational purposes only. Consult with a tax professional for personalized advice regarding your eligibility and incentives. Goettl is not responsible for the rebate amount customers may receive.
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What Our Customers Say About Us






Tai Fernandez-Estabillo, service rep is excellent. I deal with a lot of contractors in my student housing operation and he is at the top of his field. Proud to know him. Thanks for the professional service Tai.



Husam, Raymond, Johnny, Joe, Marcus; Very professional and great communication skills. Great service all around!





Mike was so very thorough and explained each thing that he was taking care of, that I asked him if I could request him for our next service.
I wasn’t sure if I was going to renew my membership with GOETTL, but after such a great experience with Mike, I’m definitely renewing..





Daniel came out to perform my yearly maintenance review he did a great job. He was very informative. Provided recommendations and very knowledgeable. Very polite and professional. I would recommend him for services






Goettl is not cheap, although their service visit is very inexpensive, their quotes are almost always considerably higher. The service from an employee like Gilbert, however, is the sole reason why I would even consider entertaining a higher cost.

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William came out for warranty work in September and quickly got our issue diagnosed and up and working again. It's always scary when your AC goes out in Texas, so I appreciate the effort to get the work done and resolved quickly.


Recommend Highly!

He certainly understands what Customer Service is all about!
Joey was on time, well-mannered, and very professional. He took care of our problem, took time to explain all aspects of the project in detail, and left the work area nice and clean.
We will definitely utilize Goettl’s services in the future, as needed and have nothing but the highest praise for Joey Martin!










I would recommend him.


Update: December 2025: Kaelyn Nuss did a great job with our annual plumbing service!




Junior and Anthony just came out to finish the hvac job in my complicated 106 year old house. They were kind and professional, just all round great young me who know their craft. My heat works great and i do not have to go into the attic anymore to change the filters.




Thermostat. Stopped working on Monday night 10/20 /2025. GOETTL Tech. Kevin Andrew text to notify me of his ETA. Was very punctual. Explain what the problem was, he checked it out , went up to attic and found the problem. Explain to me the issues that was causing the A/C Thermostat to turn off. Went into detail explaining to me what was causing the A/C Thermostat to turn off. He was very professionalc and ourteous.
Thank you Kevin... Blessings

Explained everything clearly and was very respectful..
Thanks for a job well done Frank.


















As usual we are very satisfied with Goettl















I had such a good experience with Goettl the last time, that I decided to use them again for HVAC. Kevin was the technician assigned to my job. He was very professional and provided me with a thorough and accurate diagnosis. He patiently explained everything to me and walked me through the recommended repairs and even shared alternative solutions. I have the information I need and feel comfortable moving forward. I’m in good hands. I will be requesting him as my technician for all future calls.

Like most people, I typically search for the cheapest service I can find, and I end up having other plumbers come out to check out issues with my tankless water heater, who run their mouths, upsell parts (that don't seem to be causing the problem), and generally don't really know enough about tankless water heaters. This time, I decided to go with an experienced company with a good reputation, and I am glad that I did - Goettl's prices are very reasonable and worth the service they provide.
Juan, was very knowledgeable, patient, and persistent. Even better, he was careful and humble enough to acknowledge that he didn't know everything and checked with the manufacturer at every step. Juan spent a great deal of time helping me diagnose the problem (which always seems impossible to ascertain quickly with machines like tankless water heaters), and went above and beyond to ensure that my guests and I had hot water tonight.
Juan never got frustrated; he handled everything carefully and made sure to clean up after himself when he was done. If I can have Juan take care of all of my plumbing or AC issues in the future, I will. And if you're reading reviews to decide whether to call Goettl for your issue, I would encourage you to trust their service and experience. My experience with Juan was definitely memorable.
We now have hot water again. Can I get a "hell yeah"?








We had a concerning plumbing issue, and Geo was able to diagnose the problem with impressive speed and accuracy. What I really appreciated was that he took the time to clearly explain what was wrong, showed me what he was looking at, and gave me honest, practical advice on the best solution.
He had the issue resolved in no time at all. The whole experience was seamless, from the quick scheduling to the efficient and high-quality work. It’s so refreshing to find a technician who is not only a master of his craft but also a genuinely kind and trustworthy person.
A huge thank you to Geo and the entire team at Goettl. You have a customer for life! If you need a plumber, ask for Geo—you’ll be in the best hands

We had a concerning plumbing issue, and Geo was able to diagnose the problem with impressive speed and accuracy. What I really appreciated was that he took the time to clearly explain what was wrong, showed me what he was looking at, and gave me honest, practical advice on the best solution.
He had the issue resolved in no time at all. The whole experience was seamless, from the quick scheduling to the efficient and high-quality work. It’s so refreshing to find a technician who is not only a master of his craft but also a genuinely kind and trustworthy person.
A huge thank you to Geo and the entire team at Goettl. You have a customer for life! If you need a plumber, ask for Geo—you’ll be in the best hands








Call Goettl and was able to get us on the schedule due to a cancellation they had.
Jef Eusepi our tech was fantastic.
He explained everything and showed us pictures of what he was doing and fixing.
Would definitely recommend this Company and Jef.















I have seen Goettl vans all over town and so I called them.
Got appointment right away and the Technician, Jef Eusepi, took care of our problem.









Thank you,
Greg Sanches





















This past week our service technician was Andrew Morgan and he is such a friendly, knowledgeable, and skilled technician. He spent time making sure the job was done correctly and he explained it in terms that I could understand. Not only is our unit functioning even better than before, I also gained knowledge of how the system works.













I highly recommend Goettl as this is the second time l've used them in less than a year. (2 seperate issues)... and I highly recommend them..anytime and anyday.
They have exceeded to top any expectations I could have ever had with any company.


Jerry also noticed our water pressure was low after flushing toilet then trying to wash hands in bathroom sink which were so he suggested a new pressure regulator as we have had a new better water conditioning system installed. We now have the best water pressure even when using a shower and kitchen sink faucet at the same time. Also Jerry is a master plumber and we appreciate his knowledge and experience. Will definitely call Goettl again when a plumber is needed.
Ralph & Kathy Lesmeister







The company is installing a tankless heater and the customer service is outstanding.
I recommend Geottl to all!


They made sure my carpet was covered and when they were all through they cleaned up perfectly
I would recommend your company to anyone looking to put in a new air conditioner.
Thank you so much for all you did for me.
Sincerely, June Jones

And I would highly recommend the company and the quality technicians like Jarod.
Jarod is the go to if you want excellent
Customer service and communication for any AC related issues. He is very knowledgeable, personable and trustworthy. I am grateful and satisfied.






They listened to my issue, were very through, checked for leaks, etc. I’ve lived in Lakeway for 30 years, used MANY local plumbers - but Goettl will definitely get all my business moving forward. HIGHLY recommend!
Ty, Wil & Adrian!

Everyone from the Goettl sales representative Christian, Tech / Advisor Josias recommended a HVAC A/C and Heating system replacement. Technicians team Veronica and her partner.


