If you’ve heard about the Inflation Reduction Act (IRA) and are wondering about how it affects you as a homeowner, you’re not alone. The IRA affects homeowners across the United States, and if you know how to leverage it, you can improve your home while taking enormous tax rebates.
It’s important to note that tax rebates are paid out to the purchaser or homeowner regardless of whether a tax is payable or not, whereas tax incentives reduce the amount of tax on an item to encourage purchases.
From home insulation to new appliances and installing a new heat pump, you can take advantage of this 10-year program. Here is what you need to know:
There Are Two Programs: HOMES and HEEHRA
The two programs you need to keep your eye on are HOMES and HEEHRA. Unlike HEEHRA, HOMES doesn’t require specific income requirements to maximize your return. HEEHRA is designed for low-income and medium-income homeowners and offers rebates up to $14,000 made through point-of-sale purchases.
HOMES is designed to help you save money on your energy bills by lowering your home energy consumption through the installation of new, more energy-efficient appliances and devices. When you upgrade your home systems, you earn rebates. Whether it’s your HVAC system or simply installing new insulation, there are rebates available to help offset (or completely pay for) the cost of upgrading your home.
HEEHRA takes a different approach. Based on your income level, your rebates will be different. For low-income and median-income families, you can expect to earn up to $14,000 in rebates through point-of-sale purchases for new systems. Under HEEHRA, you can earn up to $8,000 in rebates for the installation of a new heat pump.
How Long These Programs Run For
These programs are expected to last until 2031. This is important to note because while the IRA was passed federally, it’s being deployed on a state-by-state basis. Even though these programs have a long shelf life, we don’t recommend waiting until near the expiration date in the event that funding runs out.
How It’s Rolled Out to You
Every state is different. Despite the IRA going into effect January 1, 2023, it did not become “active” on that date on a state level. Each state is figuring out how to distribute IRA rebates and the process looks different across the country.
This is why we work to keep you updated on the Inflation Reduction Act as much as possible, so you can take advantage of the best opportunities for your home and for your family.
Stay up-to-date on your local government pages and any information regarding the IRA. While it can feel slow, your local government will roll out announcements when rebates can be redeemed.
How You Can Prepare
Prepare for any upgrades to your home that you plan to make. Have a clear plan laid out so that when the time comes, you can install insulation and new HVAC systems to make the most of your rebate. While it’s not covered in the IRA, you can also upgrade to a smart Wi-Fi thermostat now to begin lowering your energy consumption as soon as possible.
Getting Informed Should Be Your First Choice
Let us help guide you through the Inflation Reduction Act and how it relates to your home comfort. We’ll update you with as much information as we deem relevant through our blogs and email list.
It’s important to prepare your home and your family for the benefits of the Inflation Reduction Act. If your home had a voice … it would call First Choice!