What heat pump rebates are left in 2026, after the 25C credit ended?
The federal tax credit is gone for 2026 installs, and the federal rebate program changed its rules in May. What is still available and who qualifies.
Published 7 min read
In short
The federal Energy Efficient Home Improvement Credit (25C) does not apply to a heat pump placed in service after December 31, 2025. A heat pump installed in 2025 can still be claimed on the 2025 return, with up to $2,000 for heat pumps, if you have not filed yet or filed an extension.
The main federal money left is the High-Efficiency Electric Home Rebates program (HEEHR), run by states: up to $8,000 toward a heat pump for households under 80% of area median income, and half the cost, within the same caps, between 80% and 150%.
Since a DOE notice effective May 29, 2026, HEEHR rebates cover upgrades from existing electric equipment and new construction, not switching from gas or oil. State and utility programs have their own rules, so check your state energy office and utility first.
For three years a federal tax credit covered part of the cost of a heat pump. That credit ended for 2026 installations, and the main federal rebate program that remains changed its rules in May 2026. Much of what was written about heat pump incentives in 2025 is now out of date.
What happened to the 25C tax credit?
The Energy Efficient Home Improvement Credit, section 25C of the tax code, paid 30% of qualified costs for improvements installed from January 1, 2023 through December 31, 2025. For heat pumps, heat pump water heaters and biomass equipment the limit was up to $2,000 a year.
Public Law 119-21, signed on July 4, 2025, ended it. In the IRS’s words, “the credit will not be allowed for any property placed in service after December 31, 2025.” A heat pump installed in 2026 does not qualify, even if it was paid for earlier.
| Your situation | Federal tax credit |
|---|---|
| Heat pump placed in service in 2023, 2024 or 2025 | Claimable for the year it was installed, on Form 5695, Part II |
| Installed in 2025, 2025 return not yet filed (extension) | Still claimable; the extended due date is October 15 |
| Installed in 2025 and claimed in 2025 | The IRS required the manufacturer’s Qualified Manufacturer Identification Number (QMID) for each item |
| Placed in service on or after January 1, 2026 | Not allowed |
The IRS is explicit that the credit is taken for the tax year when the property is installed, “not merely purchased”. A filing extension gives more time to file, not to pay: tax owed was still due by the April filing date.
The separate Residential Clean Energy Credit (25D) ended the same way: it is not allowed for expenditures made after December 31, 2025, and an expenditure counts as made when installation is completed.
What federal rebates are still available?
The Inflation Reduction Act of 2022 created two rebate programs that states administer with federal money:
- HOMES (Home Owner Managing Energy Savings), for whole-home upgrades based on modeled energy savings, up to $8,000 per DOE, with a minimum savings of 20%.
- HEEHR (High-Efficiency Electric Home Rebates), for specific electric upgrades. It was marketed as HEAR, the Home Electrification and Appliance Rebates; in May 2026 DOE went back to the name in the statute.
HEEHR is still running: DOE issued new guidance for it in May 2026, and the statute makes its money available through September 30, 2031. The amounts are set in the statute:
| HEEHR rebate item | Cap |
|---|---|
| Heat pump for space heating and cooling | $8,000 |
| Heat pump water heater | $1,750 |
| Electric load service center (panel) upgrade | $4,000 |
| Electric wiring | $2,500 |
| Insulation, air sealing and ventilation | $1,600 |
| Electric stove, cooktop, range or oven | $840 |
| Heat pump clothes dryer | $840 |
| Total per household | $14,000 |
Who qualifies depends on household income relative to the area median income (AMI) where you live:
| Household income | Share of project cost covered, within the caps |
|---|---|
| Below 80% of AMI | Up to 100% |
| 80% to 150% of AMI | Up to 50% |
| Above 150% of AMI | Not eligible for HEEHR |
What changed in HEEHR in May 2026?
DOE’s Program Notice 26-2, effective May 29, 2026, rewrote parts of the program guidance for state energy offices. The changes that matter most to a homeowner:
| Change | What it means |
|---|---|
| Fuel switching removed | HVAC and appliance rebates only for replacing existing electric equipment with more efficient electric equipment. Replacing a gas or oil system is no longer covered, unless DOE later allows it for a state with money left over |
| New construction kept | HVAC and electric appliances in new construction remain eligible |
| Insulation first | Homes must use rebates for insulation and air sealing before heating and cooling upgrades, unless already insulated and sealed to a state-specified level |
| Keeping the old system allowed | A home may keep an existing fossil-fuel system when installing a heat pump, even if the heat pump is not the main source of heat |
| Timing | Programs already running had three months to adopt the changes; rebates already reserved under the old rules may go ahead |
| DIY and retail | States are encouraged to offer point-of-sale, online and mail-in rebates, and DIY purchases, except for HVAC installations |
The first row is the one most guides written before May 2026 miss. A household heating with electric resistance, such as baseboard heaters, an electric furnace or an older heat pump, fits the new rules. A household replacing a gas furnace with a heat pump generally does not, under HEEHR.
Is HEEHR open in my state?
Each state and territory runs its own program and launches on its own schedule, so availability differs from state to state and can change quickly. DOE’s own page says rebates are “available in select states” and directs homeowners to their State or Territory Energy Office. Programs that launched before May 2026 had to adjust to the new guidance, so a program’s rules may differ from what its website said earlier in the year.
To find out what applies to your address:
- Check your state energy office for the HEEHR and HOMES programs, their status and income limits.
- Check your electric and gas utilities, which may run their own rebates funded outside the federal programs.
- Search the ENERGY STAR Rebate Finder by ZIP code, and the DSIRE database of state and utility incentives.
Can rebates be combined?
The statute says a HEEHR rebate “may not be combined with any other Federal grant or rebate” for the same project. Non-federal money is a different matter: DOE’s May 2026 notice strongly recommends that states stack and braid HEEHR funding with other programs where the law allows. Utility rebates and state-funded incentives may therefore combine with HEEHR, depending on each program’s rules. Get the combination confirmed in writing before the work starts.
What should I ask before signing a contract?
- Which programs does this project qualify for, and has the contractor confirmed eligibility with each program rather than assuming it?
- Is the contractor on the state program’s qualified contractor list, where the program requires one?
- Does the program require insulation or air sealing first, and is that included in the quote?
- Is the rebate taken off the price at the point of sale, or paid to you later?
- Does the quoted equipment meet the program’s efficiency requirements, and which model numbers were used to check?
- For a heat pump installed in 2025: do you have the manufacturer’s QMID and the documents you need for Form 5695?
Questions
- Can I still get the federal tax credit for a heat pump?
- Only for a heat pump placed in service by December 31, 2025. The credit is claimed on Form 5695 for the tax year the property is installed. If you are filing your 2025 return on an extension, the IRS extended due date is October 15. Heat pumps installed in 2026 do not qualify.
- How much is the HEEHR rebate for a heat pump?
- The law caps it at $8,000 for a heat pump for space heating and cooling, and $1,750 for a heat pump water heater, within a total of $14,000 per household. Households under 80% of area median income can receive up to 100% of the cost; households between 80% and 150% can receive up to 50%. Each state sets how it runs the program within those limits.
- Does HEEHR pay to replace a gas furnace with a heat pump?
- Not under the guidance in force since May 29, 2026. DOE's Program Notice 26-2 removed rebates for fuel switching and allows HVAC and appliance rebates only for upgrading existing electric equipment to more efficient electric equipment, plus new construction. DOE said it may consider other measures allowed by law if a state has money left after implementing the new design.
- Can I combine a HEEHR rebate with other programs?
- The law says a HEEHR rebate may not be combined with any other federal grant or rebate for the same project. DOE encourages states to combine HEEHR funding with non-federal programs where the law allows, so utility and state incentives may still stack. Check the rules of each program.
Sources
- IRS — Energy Efficient Home Improvement Credit
- IRS — FAQs for modification of sections 25C, 25D and others under Public Law 119-21 (August 21, 2025)
- IRS — Get an extension to file your tax return
- 42 U.S.C. § 18795a — High-efficiency electric home rebate program (Cornell LII)
- U.S. DOE — Home Energy Rebates Program Notice 26-2: HEEHR Program for States and Territories (effective May 29, 2026)
- U.S. DOE — Home Energy Rebates Program
- ENERGY STAR — Rebate Finder
- DSIRE — Database of State Incentives for Renewables & Efficiency