The federal tax credit (25C)
From 2023 through 2025, the Energy Efficient Home Improvement Credit let homeowners claim up to $2,000 for qualifying heat pumps and up to $600 for qualifying central air conditioners and gas furnaces. The 2025 budget law (Public Law 119-21) ended the credit early: according to the IRS, it is not available for property placed in service after December 31, 2025. If you installed qualifying equipment in 2025, you may still be able to claim it on your 2025 return using Form 5695; check with a tax professional.
Rebates that may still apply
- Utility rebates. Many electric and gas utilities offer rebates for high-efficiency heat pumps, smart thermostats or tune-ups.
- State programs. The federal Home Energy Rebates programs are run by states, and availability varies by state and over time. Check your state energy office.
- Manufacturer promotions. Seasonal rebates are common in spring and fall.
The DSIRE database lists incentives by state.
Financing
Many contractors offer financing through third-party lenders. Promotional 0% offers can be good value, but some use deferred interest: if the balance is not paid in full by the end of the promo, interest is charged back to day one. Compare the APR, term, fees and total cost with a personal loan or home-equity option before signing.
Before you sign
- Get two or three itemized quotes with model numbers.
- Confirm the AHRI matched-system certificate for efficiency claims.
- Ask who applies for rebates and when you will receive them.
- Read the financing terms for deferred interest and prepayment rules.
Frequently asked questions
Can I still get the federal heat pump tax credit in 2026?
Not for equipment placed in service after December 31, 2025, according to the IRS.
Where do I find local HVAC rebates?
Check your electric and gas utilities, your state energy office and the DSIRE database.
