Can I Receive a Tax Credit for Air-Source Heat Pumps?

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According to, about 46 percent of the average annual energy bill for a single home goes toward heating and cooling. One way to reduce these costs, especially if you live in a moderate-to-cold-weather climate, is to install an Energy Star-qualified air-source heat pump. The Massachusetts Clean Energy Center says an efficient heat pump uses about one-third of the electricity of traditional electric heat. To stimulate sales, the American Recovery and Reinvestment Act of 2009 extended tax incentives on the purchase of an air-source heat pump until 2016.

Tax Credit Criteria

The current tax credit for a qualifying Energy Star air-source heat pump falls under the home energy efficiency credits conventional HVAC category. The tax credit allows you to deduct 30 percent of the total system cost up to $1,500. When shopping, look at the Energy Star tag, which will state whether the unit qualifies for a tax credit. According to instructions on Internal Revenue Service Form 5695 -- Residential Energy Credits -- total system costs include the initial purchase, as well as labor costs for on-site preparation, assembly and installation. Unless the federal government extends the tax credit program again, you have until Dec. 31, 2016, to purchase and install the unit.