HVAC tax credits and rebates in 2026
The federal tax credits that cut up to $2,000 off a heat pump and up to $600 off an efficient AC or furnace ended for equipment installed after December 31, 2025. Utility, state and manufacturer rebates still exist, and they can be worth $100 to several thousand dollars.
Typical savings still available
$100 – $2,000+utility, state and manufacturer rebates
Most homeowners can still find $100 to $2,000 in utility or manufacturer rebates, especially for heat pumps. Some states run income-qualified programs worth up to about $8,000 for heat pumps. Federal 25C and 25D credits no longer apply to 2026 installations.
Federal tax credits ended after 2025
| Credit | What it covered | Status |
|---|---|---|
| 25C Energy Efficient Home Improvement Credit | 30% up to $2,000 for heat pumps; up to $600 for qualifying AC, furnaces and boilers | Ended for property placed in service after Dec 31, 2025 |
| 25D Residential Clean Energy Credit | 30% of geothermal heat pump costs | Ended for expenditures after Dec 31, 2025 |
Changes were made by the 2025 budget reconciliation law (the "One Big Beautiful Bill Act"). Equipment installed in 2025 can still be claimed on 2025 tax returns using IRS Form 5695. Check with a tax professional.
Rebates that still exist
| Source | Typical value |
|---|---|
| Electric or gas utility rebates | $100 – $1,500+ |
| State energy programs (some income-qualified) | Varies; up to about $8,000 for heat pumps in some states |
| Manufacturer seasonal rebates | $100 – $1,500 |
| Contractor promotions and financing | Varies |
- Search the ENERGY STAR rebate finder by ZIP code.
- Check DSIRE for state and local incentives.
- Call your utility; many rebates require pre-approval or a participating contractor.
Which equipment earns the most rebates
Utility programs in 2026 favor cold-climate and high-efficiency heat pumps, then high-efficiency AC and smart thermostats. Gas furnace rebates are less common but still offered by some gas utilities for 95%+ AFUE models. See Heat pump installation cost.
Tips to capture rebates
- Ask your contractor which rebates they process; some apply them directly to the invoice.
- Keep the AHRI certificate and model numbers from your quote.
- Submit paperwork quickly; many programs have 60 to 90 day deadlines and limited funds.
Frequently asked questions
Is there a federal tax credit for HVAC in 2026?
No. The 25C credit for heat pumps, central AC, furnaces and boilers and the 25D credit for geothermal heat pumps ended for systems installed after December 31, 2025.
Can I still claim the credit for a system installed in 2025?
Yes. Qualifying equipment placed in service in 2025 can be claimed on your 2025 return with IRS Form 5695.
Are there still heat pump rebates?
Yes. Many utilities and some states offer heat pump rebates, and manufacturers run seasonal promotions. Use the ENERGY STAR rebate finder to search by ZIP code.
Sources
Prices are national averages and typical ranges from published cost data. Your price depends on your home, region, equipment and contractor, so get several written quotes. Heat & Air Costs is not an HVAC contractor; read our disclaimer.