HVAC (Heating, Ventilation, and Air Conditioning) equipment qualifies for a range of state and federal tax credits and rebates. Specifically, federal programs, like those outlined in the Inflation Reduction Act, and state programs, like NY Clean Heat, offer incentives for homeowners to upgrade their heating and cooling systems to more energy efficient alternatives.
Both residential and commercial property owners can apply for HVAC credits and rebates. Federal Residential Energy Credits only apply to a homeowner’s primary residence.

Based on the scope of your project and your annual income.
- $3,200/year in “federal residential energy” tax credits
- $700 - $7,000/unit in rebates from NY Clean Heat
- $300+ in utility rebates per unit
Claimed as a combination of point-of-sale rebates, rebates claimed from utility companies, and federal tax credits on your personal tax filing.
How to Claim
To claim Federal Residential Energy Credits, use Form 5695 when you file your personal income taxes.
To claim NY Clean Heat rebates, use a NYSERDA Clean Heat contractor for any HVAC work and replace gas/oil/propane equipment with electric equipment to maximize your savings.
To claim equipment rebates directly from your utilities provider, contact your utility provider directly.
Note that you can stack federal, state, and utility incentives to maximize your savings.
For assistance applying for HVAC tax credits and rebates (for example, for guidance on credit-eligible products and utility company equipment rebates), you can contact savings@castlepay.co or schedule a free consultation here.
Required Information
Almost all HVAC credits and rebates only apply to ENERGY STAR certified equipment. Make sure to confirm individual purchases have this certification before purchasing.
Timeline
Federal Residential Energy Credits:
- File Form 5695 with your personal tax filing. The equipment you are claiming the credit for should have been installed in the the tax year of your filing.
- Note: The cap on Federal Residential Energy Credits for the 2022 tax year is $500. The cap on Federal Residential Energy Credits for the 2023 tax year and later is $3,200 per year. If your timing is flexible, you can spread out your renovations over multiple years to maximize your tax savings on equipment purchased.
NY Clean Heat:
- NY Clean Heat rebates are claimed at the point of sale, which means that you must be aware of the program and work with a qualifying contractor before your HVAC equipment is installed.
Utility Company Equipment Rebates:
- Utility company equipment rebates (e.g. the $700 electric heat pump water heater rebate from National Grid) often run for a limited time period of several months or require you to claim the rebate within a certain period of time after your HVAC install.