Excellent system

You should verify AHRI matching number with quoting dealer.

5069750 Active Systems RHEEM RARL SERIES RHEEM MANUFACTURING COMPANY RARL-049JEZ RHPN-HM4824+RCSN-H*4824 50000 13.00 16.50 1 RCU-A-CB Yes 367 Yes

How do you filter return air?

What thermostat to be used?

I have said many times that Rheem/Rudd are probably one of the most underrated and overlooked brands in the HVAC marketplace.

You are replacing a 4 ton system? I assume you have boiler heat? What fuel source?

IMO

I am replacing a 3 1/2 ton single stage system and yes I have oil fired hot water heating system.
I plan on having a 4inch media filter installed for air filtration (my cat has allergies - dont laugh).
No installer has mentioned replacing the current thermostat. Do you have a recommendation? Do I need a special thermostat for this system??
What is a AHRI number (sorry for my ignorance)

What is your electric rate?

How much do you pay for oil?

AHRI is the official organization that certifies matching systems and the performance/efficiency numbers for residential HVAC. It is generally considered the authority. Ask dealer for matching number to confirm the system I listed in my post.

Why are you going up in size? While the system you were quoted is 2 stage and only available in full ton sizes, has dealer looked at your ductwork system to see if it can handle the extra CFMs?

IMO

Electric is 22 cents a kwh and heating oil has averaged $3.80 per gallon this year.
My house is on 3 levels and is approximately 2300 square feet. All dealers recommended a 4 ton unit in a 2 stage configeration. None did a manual J but are required to do so by the local utility in order to get the utility rebate.
The duct work was examined and can handle the extra CFM's.
A 3 1/2 ton single stage Rheem system would be $1200 less (less of a rebate from utility) but I thought the 2 stage unit would be cheaper to run over the long hall

I would want the matching Rheem thermostat or at least the equivalent like a third party brand such as HW.

I ran a quick analysis of your fuel rates, oil versus electric for heating. Results below. I assume your boiler is around 80% efficient. While you have high electric rates, on BTU basis electric is about 30% cheaper than oil down to your temperature balance point.

Cost per 100,000 btu of useable heat
Heat pump: $2.34
Oil: $3.36

Certainly the price difference between the HP version and the AC version would be recovered in probably 2-3 years. Something you may wish to consider.

IMO

"None did a manual J but are required to do so by the local utility in order to get the utility rebate."

Ask for a copy of the Manual J calculation so you know you will get the rebate.