Refundable tax credit for air source heat pumps

(a)

In general

Subpart C of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 36 the following new section:

36A.

Air source heat pump credit

(a)

Allowance of credit

In the case of an individual, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the lesser of—(1)20 percent of any qualified air source heat pump expenditures, or(2)$800.(b)

Qualified air source heat pump expenditures

The term qualified air source heat pump expenditures means an expenditure for property which uses an air source heat pump, as part of a ducted or ductless system, to heat and cool a dwelling unit, provided that—(1)the dwelling unit is located in the United States and used as the principal residence (as such term is used in section 121) of the taxpayer, and(2)the air source heat pump—(A)(i)satisfies the applicable performance requirements to meet the Cold-climate Air-Source Heat Pump Specification, as provided by Northeast Energy Efficiency Partnerships, as in effect at the time that the expenditure for such equipment is made (or any successor standards provided by Northeast Energy Efficiency Partnerships), or(ii)received the most efficient certification under applicable Energy Star program requirements which are in effect at the time that the expenditure for such property is made (or any successor standards established by the Environmental Protection Agency),(B)is installed in accordance with the Air Conditioning Contractors of America HVAC Quality Installation Specification (ANSI/ACCA Standard 5 QI–2015), or a subsequent version approved for this purpose by the Secretary of Energy, and(C)is displacing heating load previously provided by an existing natural gas, propane, resistive electric, or oil central heating system.(c)

Special rules

For purposes of this section—(1)

Application of certain rules

Rules similar to the rules under paragraphs (1), (5), (6), (7), and (8) of section 25D(e) shall apply.(2)

Joint ownership

(A)

In general

Any expenditure otherwise qualifying as a qualified air source heat pump expenditure under this section shall not be treated as failing to so qualify merely because such expenditure was made with respect to 2 or more dwelling units.(B)

Limits applied separately

In the case of any expenditure described in subparagraph (A), the amount of the credit allowable under subsection (a) shall (subject to paragraph (1)) be computed separately with respect to the amount of the expenditure made for each dwelling unit.(3)

Property financed by subsidized energy financing

For purposes of determining the amount of expenditures made by any individual with respect to any property, there shall not be taken into account expenditures which are made from subsidized energy financing (as defined in section 48(a)(4)(C)).(d)

Basis adjustments

For purposes of this subtitle, if a credit is allowed under this section for any expenditure with respect to any property, the increase in the basis of such property which would (but for this subsection) result from such expenditure shall be reduced by the amount of the credit so allowed.(e)

Denial of double benefit

A credit shall not be allowed under this section for any expenditure for which a credit is allowed under section 25C.

(b)

Conforming amendments

(1)Section 6211(b)(4)(A) of the Internal Revenue Code of 1986 is amended by inserting 36A, after 36,.(2)The table of sections for subpart C of part IV of subchapter A of chapter 1 of such Code is amended by inserting after the item relating to section 36 the following new item:

Sec. 36A. Air source heat pump credit.

(c)

Effective date

The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.