The federal Energy Efficient Home Improvement Credit (Section 25C) ended for property placed in service after December 31, 2025. Do not subtract a federal 25C credit from the cost of a new 2026 HVAC installation.
Source: IRS Energy Efficient Home Improvement Credit guidance.
Federal Section 25C is unavailable for new 2026 installations
The IRS confirms that eligible improvements made through December 31, 2025 may qualify. Buying equipment before the deadline does not qualify a system installed in 2026: the installation date matters.
Historical claims for eligible 2025 work
Eligible heat pumps installed by December 31, 2025 may qualify for a 2025 credit of 30% of qualifying costs, up to $2,000. Equipment, manufacturer identification, taxpayer eligibility, and annual limits apply. The credit is nonrefundable and excess credit cannot be carried forward.
Keep the itemized invoice and equipment documentation. Review IRS Form 5695 instructions with your tax preparer for the installation year; the historical credit is not a discount on a new 2026 project.
Check utility incentives at quote time
Utility programs can change with funding cycles, equipment requirements, and contractor participation. Ask for current program terms and written confirmation that your project qualifies before counting a rebate. This guide does not promise an available rebate or a dollar amount.
Compare the actual cost of a new system
Ask for equipment and installation costs, any confirmed rebate, current specials, and financing terms separately. Compare efficiency and expected operating costs without an expired federal credit. Existing specials and financing remain subject to their own terms.
From the team at Strike Force HVAC
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