Guide
HVAC rebates in 2026: what's still available
The federal 25C tax credit ended December 31, 2025 — but state electrification rebates (HEAR) and utility rebates are still live in many states. This is not tax advice — confirm eligibility with your installer and a tax advisor.
The federal 25C credit ended December 31, 2025
Under the One Big Beautiful Bill Act (Pub. L. 119-21, signed July 4, 2025), the federal 25C Energy Efficient Home Improvement Credit was terminated for property placed in service after December 31, 2025. If your system was installed in 2026 or later, this credit does not apply — what matters is the installation date, not when you paid or signed the contract.
Installed in 2025 (or 2023–2024)? You can still claim the credit on that year's federal return using IRS Form 5695 (Residential Energy Credits, Part II). For 2025 installs the IRS also requires the manufacturer's four-digit qualified manufacturer (QM) code on the return — ask your installer or the manufacturer for it. The credit was worth 30% of cost, with category caps:
| Heat pumps (incl. ductless mini-splits) | up to $2,000 |
| Central air conditioners | up to $600 |
| Natural gas / propane / oil furnaces | up to $600 |
Central AC and furnaces shared a $1,200 combined annual cap with other envelope improvements; heat pumps sat in a separate $2,000 annual cap. The credit was nonrefundable, and for ducted systems eligibility depended on the equipment being installed as an AHRI-matched system meeting the CEE/ENERGY STAR efficiency tier — verify the match and tier with your installer before claiming.
HEAR electrification rebates — live now, varies by state
The IRA's Home Electrification and Appliance Rebates (HEAR) program was not terminated. It is separately funded rebate money run by each state: up to $8,000 toward a qualified heat pump for space heating/cooling, capped at $14,000 combined per household across all HEAR upgrades.
HEAR is income-based — households under 80% of area median income can have up to 100% of project cost covered, and households at 80–150% AMI up to 50% — and it is applied as a point-of-sale discount through participating contractors, not claimed on a tax return. Each state runs its own program and sets its own rules: some are open, some are regional or waitlisted, and some are still launching — check your state energy office for current status.
See HEAR rebate amounts & eligible products at ENERGY STAR →
Utility & state rebates (DSIRE lookup)
On top of HEAR, many states and local utilities offer their own rebates on high-efficiency HVAC — and these often stack. Enter your ZIP to open the DSIRE incentive database filtered to your state: