HVAC tax credits and rebates: claiming what you are owed

Updated August 30, 2026 · Claude AC · 2 sources cited

The federal workhorse is gone. The Energy Efficient Home Improvement Credit (25C) — 30% of project cost, capped at $2,000 a year for qualifying heat pumps and $600 for qualifying central ACs — applied to property placed in service through 31 December 2025 and is not available for work completed after that date. If your equipment went in during 2025 or earlier, the claim still belongs on IRS Form 5695 for that tax year, with the contractor’s AHRI certificate as proof of the efficiency tier. For anything installed since, the money is now state and utility money, and it is worth more attention than it used to get.

The stacking order

State Home Energy Rebates (IRA-funded HEEHRA/HOMES, rolled out state by state): point-of-sale rebates up to $8,000 for heat pumps for income-qualified households in participating states — check your state energy office’s portal, program status varies.
Utility rebates: $200–$2,000 for efficient ACs and heat pumps in many territories, sometimes contractor-submitted. Search your utility + « HVAC rebate » before signing anything.
Manufacturer promotions and 0% financing seasons stack on top of everything public.
Order of operations: rebates reduce the project cost directly at purchase or by cheque afterwards, and with 25C retired there is no longer a federal credit sitting on top of what remains.

Paperwork that saves the claim

Keep the itemized invoice separating equipment and labor, the AHRI reference number, the model/serial of installed equipment, and (for rebates) pre-approval confirmations — several programs require application BEFORE installation. The classic lost dollar is the retroactive rebate application a program refuses; the second classic is claiming 25C on equipment below the CEE tier because the quote said « high efficiency ».

Frequently asked questions

Can renters or landlords still claim 25C for an older installation?

For work placed in service by 31 December 2025, 25C applied to an existing primary or secondary residence you improve; landlords could not claim it for rental property (different provisions apply) and renters generally could not claim building equipment they do not own. Utility rebates have their own eligibility rules and several are open to landlords.

Do window units or portables qualify for anything?

Not for 25C. Some utilities run small rebates on ENERGY STAR room ACs, and disposal/recycling bounties for old units — worth a five-minute check, not a purchase driver.

Is the 25C credit still available this year?

No. It applied to property placed in service through 31 December 2025 and was not extended. Tax law does keep moving, so confirm the current position on IRS.gov or with your preparer before you plan around it — and keep the AHRI certificate for any installation regardless, since utility programs ask for the same document.

What should I look for now that the federal credit is gone?

Your electric utility first, because rebate territories are drawn by utility rather than by state, then your state energy office for whatever remains of the IRA-funded Home Energy Rebates. Pre-approval before installation is the requirement most often missed. Beyond incentives, the cheapest remaining lever is load reduction — the attic work described in our guide to attic insulation and cooling load is not rebate-dependent.