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If you’ve recently installed a heat pump, heat pump water heater, insulation, new windows, or electrical upgrades in the Los Angeles area, you may be eligible for a 30% federal tax credit under the Inflation Reduction Act (IRA).
Most heat pump and heat pump water heater installations qualify for up to $2,000 in federal tax credits!
With changing political administrations, these incentives may not be available forever, so it’s important to take advantage of these savings while you can.
How Much Can You Claim?
30% of the total project cost, up to $2,000 per year for a heat pump or heat pump water heater in your primary residence.
Up to $1,200 per year for other energy efficiency upgrades, including insulation, electrical work, and new windows.
If you plan multiple upgrades, you can claim the tax credit each year as long as you stay within the limits.
Important Notes:
• You must have tax liability for the credit to apply (it reduces the amount of tax you owe).
• This tax credit is only available for primary residences—it does not apply to rental properties, investment properties, or new construction homes.
What Qualifies for the Federal Tax Credit?
If you’ve completed any of these home electrification projects in Los Angeles, you may be eligible to claim the credit:
Up to $2,000 per year
Heat Pump HVAC System
Heat Pump Water Heater (HPWH)
Up to $1,200 per year
Insulation & Air Sealing – Includes spray foam, blown-in insulation, and weatherproofing upgrades.
Electrical Upgrades – Electrical sub-panels or wiring to support heat pumps and heat pump water heaters.
Home Energy Audit – If you’ve hired a professional to assess your home’s energy efficiency.
Energy-Efficient Windows & Doors – Exterior doors and windows that meet Energy Star standards.
Each tax year resets the credit limit, meaning you can spread out projects over multiple years to maximize your savings.
How to Claim Your Federal Tax Credit
Step 1: Keep All Invoices & Receipts
• Ensure your invoices clearly list the type of equipment installed, the total project cost, and installation date.
• If your installation was partially covered by rebates, only the amount you actually paid out of pocket qualifies for the tax credit.
Step 2: Fill Out IRS Form 5695
• Include your expenses on Part II of IRS Form 5695 when filing your federal taxes.
• The credit will be applied directly to reduce the total amount of tax you owe.
Step 3: Consult a Tax Preparer
• If you’re unsure about eligibility, it’s best to consult a tax professional to ensure you claim the correct amount.
Need the official IRS form? Download Form 5695 here.
Act Now—Take Advantage of These Savings Before They Expire!
With political uncertainty, these federal tax credits could be reduced or eliminated in the future. If you’re considering an HVAC or energy-efficient upgrade in Los Angeles, now is the time to act!
Schedule Your Heat Pump Installation
At Fuse Los Angeles, we help homeowners navigate the best rebates and tax incentives available, making energy-efficient home upgrades more affordable than ever!
If you found this article helpful, you might also like these related posts from Fuse Service Los Angeles:
- How to Best Repair Air Conditioning in Los Angeles, California
- Why Electrify Your Home in Los Angeles?
- Federal Rebates Available for Home Electrification Under the Inflation Reduction Act
- Am I Eligible for Income-Qualified Rebates Based on My Area Median Income (AMI)?
- How to Claim the Federal Tax Credit for Your Heat Pump, Water Heater, Insulation, and More
- California Energy Smart Home Rebate: How to Qualify and Claim Your Incentive in Los Angeles
- How to Participate in TECH Clean California’s Heat Pump Water Heater Rebate Program
- I Got a Heat Pump! Now What?
- Why Is My AC Not Cooling Enough? Expert AC Repair & Freon Recharge in Los Angeles
- Why HVAC Contractors Can’t Give an Exact Price Without an On-Site Inspection
- What’s the Difference Between an Air Conditioner Leak Repair and Recharge With Leak Seal?
- Is It Worth Repairing an Old HVAC System?
