HVAC Tax Credits and Rebates in 2026 | What Changed

If you are planning a heating or cooling upgrade this year, the incentive landscape changed on January 1, 2026, and a lot of older advice online is now wrong. Here is an accurate, up-to-date look at HVAC tax credits and rebates in 2026, including what expired, what remains, and where to find the programs that actually apply to your home.

The federal heat pump credit expired at the end of 2025

The Section 25C Energy Efficient Home Improvement Credit, which offered up to $2,000 back on qualifying heat pumps and smaller amounts on high-efficiency air conditioners and furnaces, expired on December 31, 2025. Systems placed in service in 2026 do not qualify for the 25C credit. Any guide still telling you to claim a $2,000 federal heat pump credit for a 2026 installation is out of date.

What federal help still exists

The Section 25D Residential Clean Energy Credit, which covers geothermal (ground-source) heat pumps at 30 percent of project cost, remains available through 2032. Geothermal systems cost more up front than air-source equipment, but for the right home the credit meaningfully narrows the gap. Air-source heat pumps, however, no longer have a dedicated federal credit in 2026.

State and utility rebates are now the main opportunity

With the federal air-source credit gone, state programs and utility rebates carry more weight in 2026. Many electric utilities offer rebates on qualifying high-efficiency heat pumps, air conditioners, and smart thermostats, and amounts vary widely by provider and program year. Some states also run their own efficiency and electrification incentives. Because these change frequently, the reliable way to check is the federal DSIRE database of state incentives for renewables and efficiency.

Our HVAC rebate and incentive finder points you to the program types available for your state and equipment, then links you straight to the current listings.

How incentives change the math

A rebate or credit lowers your net cost, which shortens the payback period on a more efficient system. If a high-efficiency heat pump qualifies for a utility rebate, the effective price can land close to a standard system while cutting your running costs. Estimate the installed price first with our heat pump cost calculator, then subtract any rebate you confirm to see your true out-of-pocket figure.

Bottom line for 2026

Do not count on the expired 25C heat pump credit. Do look at the surviving 25D geothermal credit if you are considering ground-source, and treat state and utility rebates as your primary savings in 2026. Always verify a program with the administrator or your utility before you rely on it, since terms and funding change during the year.

How to document what you qualify for

Whether you are claiming the geothermal credit or a utility rebate, paperwork matters. Keep your itemized invoice, the equipment model numbers, and the efficiency certification your contractor provides. Utility rebates often require an application within a set window after installation, and some ask for a certificate of completion or an inspection. For the federal 25D geothermal credit, the claim is made on your tax return for the year the system is placed in service, so retain records with your tax documents and confirm details with a tax professional. Building the habit of collecting these documents at installation saves a scramble later.

When incentives shrink, financing fills the gap

With the federal air-source credit gone, more homeowners are spreading the cost of an efficient upgrade over time rather than paying the full difference up front. Manufacturer and contractor financing programs are common, and a modest monthly payment can be offset by the lower running cost of a more efficient system. Before you commit, estimate the payment on any amount and rate with our HVAC financing calculator, and compare that against the monthly energy savings a higher-efficiency system delivers. If the running-cost savings approach the financing payment, the upgrade can be close to cost-neutral month to month even without a federal credit.

Frequently asked questions

Is there a federal heat pump tax credit in 2026?

The Section 25C heat pump credit expired December 31, 2025 and does not apply to systems installed in 2026. The Section 25D geothermal credit remains through 2032.

What HVAC rebates can I still get in 2026?

Many utilities and some states still offer rebates on high-efficiency heat pumps, air conditioners, and thermostats. Check the DSIRE database for current programs in your area.

Does a high-efficiency AC still get a tax credit?

The federal 25C credit for high-efficiency air conditioners expired at the end of 2025. State and utility rebates may still apply in 2026.