How do I claim the tax credit for a heat pump installed in 2025?
The 25C credit ended for 2026, but a heat pump placed in service in 2025 can still be claimed on Form 5695. What qualifies, what to enter and what you need.
Published 3 min read
In short
A heat pump placed in service in 2025 can be claimed under the Energy Efficient Home Improvement Credit on Form 5695, Part II, lines 29a to 29h: 30% of qualified cost, including installation labor, up to $2,000.
For 2025 the IRS requires the manufacturer's Qualified Manufacturer Identification Number (QMID), and the heat pump must meet the highest efficiency tier set by the Consortium for Energy Efficiency (CEE) at the start of 2025. The extended due date for 2025 returns is October 15.
Public Law 119-21 ended the Energy Efficient Home Improvement Credit, section 25C, for any property placed in service after December 31, 2025. It did not take away the credit for work finished before then. If a heat pump went in during 2025, the credit is claimed on the 2025 return, and the rules below are the ones from the IRS’s 2025 instructions for Form 5695.
Does my heat pump qualify?
Three conditions decide it:
| Condition | What the IRS instructions say |
|---|---|
| When | Placed in service in 2025. The credit is taken for the tax year the property is installed, “not merely purchased” |
| Where | Installed on or in connection with a home in the United States that you used during 2025 |
| Efficiency | The heat pump must “achieve the highest efficiency tier established by the CEE that is in effect as of the beginning of the calendar year in which the property is placed in service” |
| Manufacturer | The item must come from a qualified manufacturer, and you must report its QMID |
The CEE is the Consortium for Energy Efficiency, which publishes efficiency tiers for heating and cooling equipment. If your paperwork does not say whether the installed model met the tier in effect at the start of 2025, ask the contractor or manufacturer to confirm it in writing before relying on the credit.
How much can I claim?
The credit is 30% of qualified expenses. For heat pumps, heat pump water heaters and biomass equipment together, the limit is $2,000 a year. The instructions allow labor costs “properly allocable to the onsite preparation, assembly, or original installation of the property” to be included for this equipment.
This $2,000 limit is separate from the $1,200 annual limit that applies to other qualifying improvements.
What goes on Form 5695?
Heat pumps are entered in Part II, Section B, “Residential Energy Property Expenditures”:
- Line 29a: the QMID and the amount paid for the most expensive electric or natural gas heat pump.
- Lines 29b to 29f: other qualifying equipment in the same group, as the form describes.
- Line 29h: the total for this group, which may not exceed $2,000.
Report the resulting credit on your return as the Form 5695 instructions direct. Keep the invoice, the manufacturer’s documentation showing the QMID and the efficiency tier, and proof of the installation date with your tax records.
Is it too late?
For many people, no. The IRS extended due date for individual returns is October 15 for those who filed Form 4868, the automatic extension. An extension gives more time to file, not to pay: tax owed was due by the April filing date.
A heat pump installed in 2026 cannot be claimed under 25C at all. For a 2026 project, the main federal money left is the state-run HEEHR rebate program. Its rules changed in May 2026; see our guide to heat pump rebates after the 25C credit ended.
This page explains what the IRS instructions say. It is not tax advice for your situation; for that, use the IRS instructions themselves or a tax professional.