Incentives
HVAC rebates and tax credits: what you can actually claim
The federal credit is gone. Some of the money is not. This page separates the two and says who runs what survives.
Written by HYRE HVAC Research Desk Primary-source research, data analysis and fact checking
The direct answer
For a residential HVAC installation completed in 2026, the federal tax credit is $0. Public Law 119-21 ended both home credits, § 25C and § 25D, after December 31, 2025.
What survives is not tax law: DOE Home Energy Rebates, run by your state energy office, and utility rebates, run by the utility that bills you.
What ended, and what survives outside the tax code?
Both Internal Revenue Code sections that covered residential heating and cooling — 26 U.S.C. § 25C, the Energy Efficient Home Improvement Credit, and 26 U.S.C. § 25D, the Residential Clean Energy Credit — were terminated by Public Law 119-21 (139 Stat. 72), enacted July 4, 2025.
26 U.S.C. § 25C(i) now reads, in full: “This section shall not apply with respect to any property placed in service after December 31, 2025.”
What survives is not tax law. The Department of Energy’s Home Energy Rebates are appropriations made by the Inflation Reduction Act, they sit outside the Internal Revenue Code, and Public Law 119-21 did not touch them.
Utility rebates survive for the same reason — they were never federal tax law to begin with. Both are administered locally, by your state energy office and by the utility that bills you, and neither publishes a national table that stays current.
So the honest map is: the federal credit is $0, and everything still worth chasing is administered by somebody whose name is on your utility bill or your state’s energy office letterhead.
Why this page reads differently from the others
Almost every page competing for this search is a table of dollar amounts. A large share of those tables are quoting law that was repealed on July 4, 2025.
Source fact: Public Law 119-21, 139 Stat. 72, enacted July 4, 2025 and commonly called the One Big Beautiful Bill Act, amended both residential energy credit sections.
Section §70505(a) of that Act substituted December 31, 2025 for the previous termination date of December 31, 2032 in 26 U.S.C. § 25C. Section §70506(a) substituted December 31, 2025 for December 31, 2034 in 26 U.S.C. § 25D.
We read both amended sections, and their amendment notes, on September 5, 2026.
HyreHVAC analysis: The reason so much published material has not caught up is structural rather than dishonest. Manufacturer collateral, contractor proposal templates and the entire back catalog of HVAC incentive content were written during the years the credits existed, and none of it updates itself.
But the effect on a purchase decision is identical whether the cause is deception or inertia.
A heat pump proposal carrying a $2,000 federal credit line is overstating the value of the purchase by $2,000, and a geothermal proposal carrying a 30% federal credit — 26 U.S.C. § 25D had no dollar cap — is overstating it by a five-figure sum.
What this page will not do: It will not print a rebate amount for any state, utility or program.
The only broad public index of energy incentives in the United States is DSIRE, and its programmatic access is a paid subscription with no published license terms and no bulk export.
We hold no licensed incentive dataset, and the standing position of this site is that we publish no amount we cannot re-verify on a schedule.
A table of rebate figures starts decaying the day it publishes and gives the reader no signal when it has.
The rebate statistics page publishes what we can defend instead — the Department of Energy’s own allocation table for all 56 jurisdictions, joined to household counts — and it is explicit that an allocation is not a rebate you can claim.
How the federal position got here
Four dates. The third is the one that changes what a 2026 buyer can claim, and the fourth is why so many pages still get it wrong.
August 16, 2022
The Inflation Reduction Act creates two different kinds of moneyPublic Law 117-169 both extended the tax credits and, separately, appropriated funds for the DOE Home Energy Rebates at IRA §§ 50121 and 50122.
That split — credits inside the tax code, rebates outside it — looked like a drafting detail at the time.
It is now the entire reason the answer to “what can I claim” is not simply “nothing”.
January 17, 2025
The IRS publishes how a rebate interacts with a creditFact Sheet FS-2025-01 sets out the three-way split between a utility subsidy, a rebate and a state energy-efficiency incentive — three legally distinct treatments that most writing on this subject collapses into one. That guidance still governs, and it is worked through on the stacking page.
July 4, 2025
Public Law 119-21 terminates both credits26 U.S.C. § 25C is closed to property placed in service after December 31, 2025. 26 U.S.C. § 25D is closed to expenditures made after the same date. The Act is a tax act: it amends the Internal Revenue Code and it does not touch the DOE appropriations.
Read on September 5, 2026
The IRS’s own credit page still had not been rewritten to lead with the repealThe Energy Efficient Home Improvement Credit landing page on irs.gov, last reviewed or updated April 28, 2026, states that the credit may be claimed “for improvements made through December 31, 2025” and makes no reference to Public Law 119-21.
HyreHVAC analysis: that page is not wrong, but it reads as a live credit to anyone who does not already know the date has passed. The authoritative statement of the termination is the statute itself and IRS Fact Sheet FS-2025-05, not the landing page.
Every provision the Act touched, and whether it is yours to claim
Two of these survive into mid-2026, which is why they turn up in search results as though they were still available to a homeowner. Neither of them is.
| Code section | What it is | Closed for | Claimable by a homeowner replacing HVAC in 2026? |
|---|---|---|---|
| § 25C — Energy Efficient Home Improvement Credit | The residential HVAC credit. Heat pumps, air conditioners, furnaces, boilers, insulation. | property placed in service after December 31, 2025 | No |
| § 25D — Residential Clean Energy Credit | Geothermal heat pumps at 30% with no cap. The larger loss of the two. | expenditures made after December 31, 2025 | No |
| § 25E — Previously-owned clean vehicle credit | Vehicles. Listed because it shares the fact sheet, not because it touches HVAC. | acquired after September 30, 2025 | No |
| § 30D — Clean vehicle credit | Vehicles. | acquired after September 30, 2025 | No |
| § 45W — Qualified commercial clean vehicles credit | Vehicles. | acquired after September 30, 2025 | No |
| § 30C — Alternative fuel vehicle refueling property credit | EV charging equipment, not heating or cooling. | placed in service after June 30, 2026 | No |
| § 45L — New Energy Efficient Home Credit | Survives into mid-2026, but it is the builder’s credit on a newly acquired home. A homeowner replacing equipment in an existing house cannot claim it. | qualified new energy efficient home acquired after June 30, 2026 | No |
| § 179D — Energy Efficient Commercial Buildings Deduction | Survives into mid-2026, but it is a deduction for commercial buildings. Not a home. | property the construction of which begins after June 30, 2026 | No |
Termination dates from the IRS’s own table in Fact Sheet FS-2025-05, with the statutory text verified against the United States Code where it bears on HVAC. Retrieved September 5, 2026.
§45L and §179D are the two that mislead. §45L survives until June 30, 2026 but it is the builder’s credit on a newly acquired home, and §179D is a deduction for commercial buildings. Neither is available to a homeowner putting a new system into an existing house.
The four categories of money, and which two are real
Incentives get written about as one undifferentiated pile. They are not. They come from four different places, are governed by four different bodies of rule, and two of them no longer exist for a 2026 installation.
1. A federal tax credit — gone
Claimed on your federal return, reduces tax owed rather than the price you pay, and arrives months after the installation. Both HVAC-relevant sections are terminated.
26 U.S.C. § 25C covered air-source heat pumps, central air conditioners, furnaces and boilers, heat pump water heaters, insulation and air sealing, exterior windows and doors, certain panel upgrades, and a home energy audit.
26 U.S.C. § 25D covered ground-source (geothermal) heat pumps, at 30% of qualified expenditure with no dollar cap.
For a 2026 installation this is $0: The full statutory position, including what is still claimable on a 2025 return filed during 2026, is on the federal credit page.
2. A DOE Home Energy Rebate — survives, administered by your state
Funded by Inflation Reduction Act of 2022, Public Law 117-169, 136 Stat. 1818 (August 16, 2022) and administered by state and territory energy offices.
Home Efficiency Rebates (HOMES) (IRA § 50121) covers whole-house energy-saving retrofits meeting a minimum modeled or measured energy saving, statutory maximum $8,000.
Home Electrification and Appliance Rebates (HEAR) (IRA § 50122) covers qualified electrification projects including heat pumps and heat pump water heaters, income-qualified, statutory maximum $14,000.
These are appropriations, not tax provisions, and Public Law 119-21 did not touch them. DOE’s own status line, read September 5, 2026: “Home Energy Rebates are now available in select states. Additional details on active state, territory or Tribal rebate programs are coming soon.”
DOE publishes no national list of which state programs are open today. Both energy.gov program pages route the reader to their State or Territory Energy Office instead.
The statutory maxima above are ceilings written into the IRA, not amounts anybody is offering you — what your state actually pays, if its program is open at all, is set by the state.
3. A utility rebate — survives, and is where most residential HVAC money now sits
Administered by the utility that bills you, on the utility’s own terms, funded through rates or through a state efficiency mandate. It was never federal tax law and the repeal has no bearing on it.
HyreHVAC analysis: With the federal layer gone, this is the largest remaining pool for a typical replacement, and it is also the one with the tightest procedural traps — pre-approval before installation, enrolled-contractor requirements, and midstream discounts that must appear on the invoice.
If you have separate electric and gas utilities you have two separate programs, and neither will mention the other.
4. A state credit or state incentive — separate, and taxed differently
Some states run their own credits and incentives, and Public Law 119-21 did not affect any of them. These are checked through your state energy office, not through the IRS.
The part nobody mentions: the IRS has published guidance saying that a state incentive labeled a “rebate” may not qualify as a rebate under federal income tax law, in which case its value could be included in your gross income.
That is the opposite of how these are usually described. The guidance is quoted in full on the stacking page.
The edge case that decides a 2025 project
If your system was contracted and paid for in 2025 but finished in 2026, the answer is not what most people assume.
Source fact: The operative test in 26 U.S.C. § 25C(i) is placed in service. The test in 26 U.S.C. § 25D(h) is expenditures made. Neither is ordered, paid, delivered, financed or contracted.
26 U.S.C. § 25D(e)(8) then fixes when an expenditure is made, verbatim: “Except as provided in subparagraph (B), an expenditure with respect to an item shall be treated as made when the original installation of the item is completed.”
Source fact: The IRS has confirmed this for 26 U.S.C. § 25D. Fact Sheet FS-2025-05, Q7: “Section 25D(e)(8)(A) provides that an expenditure with respect to an item is treated as made when the original installation of the item is completed.”
The accompanying guidance states that the credit cannot be claimed for property installed after December 31, 2025 even if the taxpayer paid for the property on or before that date.
HYRE HVAC Research Desk reading — not an IRS position: Because § 25C(f) imports rules similar to § 25D(e)(8), the desk reads the same installation-completion test as governing § 25C — so a system paid for in December 2025 but installed in January 2026 falls outside the credit.
This is the HYRE HVAC Research Desk’s reading of the statutory cross-reference.
The IRS has published no § 25C-specific guidance on the 2025-purchase / 2026-installation case: FS-2025-05 contains exactly one § 25C question, and it concerns manufacturer reporting.
We record that distinction because it matters: on 26 U.S.C. § 25D the answer is published, and on 26 U.S.C. § 25C it is our reading of a cross-reference.
Anyone in this position should take it to a tax professional rather than to us.
This is the single most consequential detail in the cluster and we have found no competitor page that addresses it. It is worked through in full, with the statutory text on the page, on the federal credit page.
The rest of this archive
What to do this week, in order
Recommendations, labeled as such. None of them requires knowing a rebate amount, because the amount is almost never what decides whether you get the money.
Look at the savings or net-cost column of each bid. Any line reading “$2,000 federal tax credit”, “30% federal credit” or “federal incentive” is quoting terminated law.
Ask for the proposal to be reissued without it and compare the bids again on the new numbers — before you discuss rebates at all, because a utility rebate stacked onto a phantom credit is being applied to a figure that was never real.
Not whether they are licensed. Enrollment is a separate commercial choice, and a large share of programs pay only when the installer is on their own participating list. Get it in writing before the contract.
The utility whose account number is on your bill is the only source whose terms bind your account. Search that page for “pre-approval”, “prior approval” or “application must be submitted before installation”, and read that paragraph twice. Do it separately for electricity and gas if they are different companies.
DOE says the rebates are “available in select states” and routes residents to their state or territory energy office rather than publishing a national lookup. Anyone showing you a current state-by-state open/closed map is asserting something DOE itself does not publish. Ask the office.
Midstream programs pay the distributor or contractor and are supposed to arrive as a lower price. If the discount is not an itemized line on your invoice you cannot prove it reached you — and the program now records that rebate as spent at your address.
This is the failure the repeal has made common. The upgrade tier that made sense with a $2,000 credit attached may not make sense without one, and the credit is gone. Decide on the equipment on its own merits and treat any surviving rebate as a discount you confirm afterwards, not as a reason.
Questions
Is there a federal tax credit for a new HVAC system in 2026?
My contractor’s quote shows a $2,000 federal tax credit. Is that wrong?
Did the DOE Home Energy Rebates get canceled too?
What about the geothermal credit?
I paid for my system in December 2025 but it was installed in January 2026. Can I still claim?
Why does this page not list rebate amounts for my state?
Could the credits come back?
Written and audited by
HYRE HVAC Research Desk
Primary-source research, data analysis and fact checking
We are a research desk, not a sales floor. We read the federal microdata file, the statute or the manufacturer data sheet ourselves, and we publish the figure with the document it came from and the date we retrieved it.
Where a number cannot be traced to a primary source, we publish the shorter page and say what we could not verify.
The counts below are generated from the published pages themselves, last counted September 28, 2026, and they are what we have actually published rather than what we intend to.
- 13
- studies published
- 12
- federal sources read and cited
- 8
- studies published with their full dataset as CSV
- 51
- jurisdictions reproduced against EIA’s own tables
How this desk works
- Primary sources only. Federal data comes from the agency that collects it, in the file that agency publishes. We do not cite an article that cites a source; we download the source and compute the figure ourselves.
- We validate against the agency before we publish. First, we use each federal microdata file to reproduce the agency’s own published tables. Our cooling research reproduces EIA’s state estimates and standard errors for all 51 jurisdictions. That check caught a variance formula that was off by a factor of four.
- Every estimate carries its uncertainty. These are survey figures, not counts. Standard errors are computed from the replicate weights the federal file supplies and printed beside the estimate. An estimate too imprecise to publish is reported as such rather than printed.
- Nothing is typed by hand. Prose, tables and charts all read from one dataset built by script, so a number in a sentence and the same number in the table below it cannot disagree.
- We publish the data, not just the conclusion. 8 of our 13 studies offer the full computed table as a CSV download on the page, so you can check the analysis or disagree with it. A study without a row-level dataset gets no download link and claims none in its structured data.
- We correct in public. Where we have published a figure wrongly we fix the figure, rewrite any analysis that rested on it rather than patching the number underneath it, and leave a dated correction note on the page.
- We do not install or sell HVAC equipment, and we take no payment for placement, ranking or a favorable mention. Nobody buys a position on this site.
Data as of US Code and IRS guidance as retrieved September 5, 2026. Authorship on this site is organizational: the analysis belongs to the desk rather than to a named individual, and we do not publish credentials we do not hold. Our editorial policy sets out how we source, date and correct what we publish.
Sources & retrieval dates
Decide on the equipment first, then chase the money
The federal layer is gone, so the system has to justify itself on running cost and service life alone. Both are computed from federal data on this site, with the assumptions on the page.
This is not tax advice: HyreHVAC does not install, service or sell HVAC equipment, is not a tax adviser, and receives no fee from any incentive program. What is published here is the statutory text with the date we read it.
Tax law changes, and it changed here recently — confirm the current position at irs.gov and with a tax professional before you put any credit or rebate into a purchase decision, in either direction.