Current Federal/State/Utilities Tax Incentives/Rebates

Federal and State Tax Incentives

The Inflation Reduction Act (IRA) offers rebates for Washington state families who purchase a heat pump. Families making 80% or less of the state’s median income are eligible for up to $8,000 in rebates. Households making 80-150% of the median state income are eligible for a $4,000 rebate.
The Energy Efficient Home Improvement credit allows households to deduct 30% of the costs for buying and installing a heat pump up to $2,000.

New federal income tax credits are available through 2032, providing up to $3,200 annually to lower the cost of energy-efficient home upgrades by up to 30 percent. Improvements such as installing heat pumps, heat pump water heaters, insulation, doors and windows, as well as electrical panel upgrades, home energy audits and more, are covered by the tax credits and can help families save money on their monthly energy bills for years to come.

In addition to the energy efficiency credits, homeowners can also take advantage of the modified and extended Residential Clean Energy credit, which provides a 30 percent income tax credit for clean energy equipment, such as rooftop solar, wind energy, geothermal heat pumps, and battery storage through 2032, stepping down to 22 percent for 2033 and 2034.