Upgrading to an energy-efficient heating and cooling system is one of the best ways to improve comfort while reducing energy costs—and thanks to ductless mini-split tax credits, making the switch to a ductless mini-split system is now more affordable than ever.
In this blog from Honest Abe’s Heating and Cooling, we’ll walk you through the federal tax credits available for mini-split systems, how to find additional incentives in Indiana, and how our expert team can help you maximize your savings.
The Benefits of Installing a Ductless Mini-Split Unit
Unlike a central air conditioner, which cools the entire home at once, a mini-split system lets you control the temperature in individual rooms or across multiple zones. No more thermostat battles or wasting energy on empty spaces!
Each indoor unit connects to a single outdoor unit through refrigerant tubing, which distributes cool air efficiently while keeping noise and bulky equipment outside. Installation is simple and only requires a small hole in the wall, making it a great choice for homes without ductwork. But even in homes with existing ducts, ductless mini-splits offer targeted cooling and heating for areas that struggle to stay comfortable, like upstairs bedrooms, additions, sunrooms, or garages.
A ductless air conditioner doesn’t just improve cooling—it also helps with air quality. Traditional ducted systems collect dust, allergens, and mold, which can spread through your home. Since mini-split air conditioners don’t use ducts, they help keep your air cleaner and fresher. Plus, mini-splits can also double as a heating system in the winter, making them a year-round comfort solution.
If you need a system that adapts to your heating and cooling needs, works efficiently in multiple rooms, and gives you better control over your home’s comfort, a ductless mini-split is a great choice.
Federal Tax Credits for Energy-Efficient Home Improvements
The Energy Efficient Home Improvement Tax Credit (EEHIC) is part of the Inflation Reduction Act (IRA) of 2022, which expanded and extended tax incentives for people investing in energy-efficient home upgrades.
Who Qualifies?
This tax credit is for residential properties only—it does not apply to businesses or commercial properties.
What’s Covered?
Homeowners can receive a 30% tax credit (up to $2,000 per year) for qualified heat pumps and ductless mini-split systems.
How Long Is the Credit Available?
This program is active through 2032, giving you a decade to take advantage of savings.
Eligibility Requirements for Mini-Split Systems
To meet tax credit eligibility, your ductless mini-split system must:
- Meet ENERGY STAR® energy efficiency ratio requirements
- Be installed in an existing primary residence (not new construction or a rental)
- Be purchased and installed between January 1, 2023, and December 31, 2032
How to Claim the Federal Tax Credit for a Mini-Split System
Claiming your tax credit is straightforward but requires proper documentation. Here’s how to ensure you receive your maximum savings:
1. Purchase an ENERGY STAR® Certified Mini-Split
Before purchasing, confirm that the outdoor unit and indoor units meet ENERGY STAR® efficiency standards.
2. Save All Receipts and Documentation
Keep copies of your purchase receipt, installation invoice, and Manufacturer’s Certification Statement (a document proving eligibility).
3. File IRS Form 5695 With Your Tax Return
When filing your federal income taxes with the Internal Revenue Service, complete IRS Form 5695, Residential Energy Credits, to report your eligible expenses. The credit is applied to reduce the amount of taxes you owe (it is not a rebate).
4. Claim the Credit for the Year of Installation
The credit must be claimed for the tax year when the installation was completed—not the purchase year if they differ.
5. Keep Records for Future Tax Years
Since the Inflation Reduction Act tax credits are available through 2032, it’s highly recommended to keep your records in case of future updates or audits.
Finding Other Energy Efficiency Incentives in Indiana
Beyond federal tax credits, Indiana homeowners may qualify for additional incentives to offset the cost of installing a ductless mini-split system.
Utility Company Rebates
Many Indiana utility providers offer cash rebates for installing mini-split systems or other energy-efficient heating and cooling upgrades.
State and Local Energy Programs
Check the Indiana Office of Energy Development website for state-funded rebates and grant programs. Programs change frequently, so it’s worth checking for updates.
Additionally, the Database of State Incentives for Renewables & Efficiency (DSIRE) is a great resource for finding Indiana-specific energy efficiency incentives.
Manufacturer and Dealer Promotions
Brands like Carrier and ENERGY STAR® often offer limited-time rebates and financing promotions for qualifying mini-split units.
By combining federal tax credits, state programs, and local rebates, homeowners like you can maximize their savings on an energy-efficient ductless mini-split system.
How Honest Abe’s Can Help You: Expert Advice and Heat Pump Services
Upgrading to a ductless mini-split is a smart way to improve comfort and cut energy costs, but navigating tax credits, rebates, and installation can feel overwhelming. At Honest Abe’s Heating and Cooling, we make the process less of a burden. We’ll help you choose the right system, install it with care, and ensure you get every savings opportunity available. As a Carrier Factory Authorized Dealer, we can connect you with exclusive discounts and top-quality equipment.
From start to finish, we handle your ductless mini-split installation in Lawrence, IN, so you don’t have to stress about a thing. And to keep your system running smoothly, we offer expert maintenance and repair services to help you avoid unexpected issues and keep energy costs low.
With our next-day service, certified technicians, and flexible financing options, upgrading your heating and cooling system has never been easier!
Install a Ductless Mini-Split and Save—Let’s Get Started!
At Honest Abe’s Heating and Cooling, we don’t just install mini-splits—we make sure they’re set up for optimal performance, energy savings, and long-term reliability.
Contact us today to explore your options, take advantage of ductless mini-split tax credits, and enjoy reliable, energy-efficient comfort for years to come.
