Upgrading to a new HVAC system doesn’t just save you money on energy costs — it can also help you qualify for valuable tax credits. Thanks to the Inflation Reduction Act of 2022, energy efficiency tax credits for residential homes have been extended through 2032.
For homeowners in Kansas City, this means exciting opportunities to save even more when replacing your air conditioner, ductless mini-split, furnace, heat pump, or boiler.
Read on to learn how you can take full advantage of these rebates and credits in 2025.
What’s the Difference Between Tax Credits & Rebates?
Tax credits and rebates are both designed to help you save money, but they work differently.
A tax credit offsets the amount you owe when filing your taxes, directly reducing your tax bill. However, it doesn’t result in cash back if you don’t owe taxes.
A rebate, on the other hand, reimburses you for part of your investment in cleaner energy, providing cash back after your purchase. Keep in mind that rebates aren’t given upfront — you’ll need to wait for them to process after you file your taxes for the year in which you made the purchase.
Federal HVAC Tax Credits
The Inflation Reduction Act (IRA), signed into law in August 2022, represents the largest investment in clean energy and climate solutions in U.S. history. As part of this act, homeowners can take advantage of federal tax credits for energy-efficient HVAC systems.
Here’s a breakdown of eligible equipment types:
Air-Source Heat Pumps
- Credit: 30% of the project cost, up to $2,000
- System requirements: Air-source heat pumps must meet ENERGY STAR® Most Efficient criteria. Starting in 2025, there are two eligibility pathways — one for heating-dominated applications and another for cooling-dominated and dual-fuel setups.
Ductless Mini-Splits
- Credit: 30% of the project cost, up to $2,000
- System requirements: Ductless mini-splits also fall under the ENERGY STAR Most Efficient criteria for 2025, with flexible pathways based on heating or cooling needs.
Central Air Conditioners
- Credit: 30% of the project cost, up to $600
- System requirements: Split central air conditioners must be ENERGY STAR-certified with a SEER2 16 or higher. All ENERGY STAR-certified packaged systems qualify.
Gas & Oil Boilers
- Credit: 30% of the project cost, up to $600
- System requirements: Boilers must be ENERGY STAR-certified and achieve a 95% AFUE or higher.
Gas Furnaces
- Credit: 30% of the project cost, up to $600
- System requirements: Gas furnaces must be ENERGY STAR-certified with a 97% AFUE or higher to qualify.
What Federal Programs Are There for Home Energy Rebates?
Homeowners can also benefit from federal rebate programs designed to make energy-efficient upgrades more affordable. Here are two key options:
- The Home Electrification and Appliance Rebates Program: This program provides rebates for specific energy-efficient products purchased by low- and moderate-income households.
- The Home Efficiency Rebates Program: This program offers rebates for energy-efficient product installations that reduce total household energy use by 20% or more, and the products must be ENERGY STAR-certified. There are no income requirements.
HVAC Rebates for Kansas City Homeowners
In Kansas City, additional rebates are available through local utility providers. These include:
Are There Any Exclusions for HVAC Rebates?
While HVAC rebates offer significant savings, there are some exclusions to keep in mind. These programs don’t cover:
- High-income households earning more than 150% of the area’s median income
- New construction properties
- Systems installed before the Inflation Reduction Act took effect
- Multiple federal rebates for the same system
However, homeowners can combine federal rebates with local utility rebates for additional savings.
Start Saving with Polestar
If it’s time to replace your AC, mini-split, furnace, boiler, or heat pump, Polestar Plumbing, Heating & Cooling is here to help you maximize your savings.
Our upfront pricing, free replacement estimates, and financing options make replacement affordable and stress-free.
With over 40 years of experience and a team of licensed, bonded, and insured technicians, we’re the local experts in HVAC installation and replacement.
Contact Polestar today to request a free estimate on HVAC replacement in Kansas City and start saving with HVAC tax credits and rebates.
