Heat pump tax credit in 2026
Short answer: the federal 25C and 25D heat pump tax credits expired at the end of 2025. Here is exactly what changed — and where the savings went.
What changed at the end of 2025
For several years, the federal government offered two heat pump tax credits under the Inflation Reduction Act: the 25C Energy Efficient Home Improvement Credit (30% of an air-source heat pump, up to $2,000/year) and the 25D Residential Clean Energy Credit (30% of geothermal, with no cap). Both were terminated for property placed in service after December 31, 2025 under the 2025 One Big Beautiful Bill Act (P.L. 119-21, signed July 4, 2025). In plain terms: there is no federal heat pump tax credit in 2026.
What still saves you money in 2026
- State rebates & tax credits. Many states run their own programs — some generous (e.g., Mass Save, Efficiency Maine, NY Clean Heat). See our state rebates guides.
- Utility rebates. Your electric or gas utility often pays $200–$3,000+ for a qualifying heat pump, frequently at the point of sale.
- HEEHRA point-of-sale rebates. Income-qualified households can still access these where state funding remains — but several states have already reserved or exhausted Phase I funds, so check current status.
With the federal credit gone, these local programs are now the main way to cut the installed price.
What to do now
- Look up your state and utility programs before you buy — and confirm they are still funded.
- Use a participating installer so point-of-sale rebates come off the price directly.
- Right-size and shop 3 quotes — see our cost calculator and savings calculator to model the real numbers without the federal credit.
Frequently asked questions
Is there a federal heat pump tax credit in 2026?
No. The 25C (air-source) and 25D (geothermal) federal credits expired December 31, 2025 and are not available for systems installed in 2026.
Can I still claim the credit for a 2025 install?
Yes — if your qualifying heat pump was placed in service on or before Dec 31, 2025, you can claim it on your 2025 federal return using IRS Form 5695.
What incentives replace the federal credit?
State tax credits and rebates, utility rebates, and income-qualified HEEHRA point-of-sale rebates (where state funding remains).
Did the HEEHRA $8,000 rebate end too?
HEEHRA is funded through state programs, not the federal tax code, so it was not repealed — but many states have limited or already-reserved funding, so confirm current availability in your state.
Related
Sources & further reading
Educational guide, reviewed against US DOE & ENERGY STAR guidance and updated June 2026. Estimates only — not a substitute for a professional assessment or Manual J load calculation.