The Confusion Is Real. Here’s What Actually Survived.
If you’ve been reading online that “all the energy tax credits expired,” you’ve been misinformed. Some did. But the one that matters most to homeowners — the heat pump and HVAC tax credit — is still available in 2026.
Here’s exactly what changed and what didn’t.
What Expired (December 31, 2025)
The One Big Beautiful Bill Act, signed in 2025, accelerated the phase-out of several Inflation Reduction Act (IRA) tax credits. The following credits are no longer available for improvements made in 2026:
• Insulation and air sealing materials (was 30% up to $1,200)
• Exterior windows, doors, and skylights
• New and used electric vehicle credits (ended September 30, 2025)
• Residential clean energy credits for solar and battery storage
What’s Still Alive Through 2032
The Section 25C Energy Efficient Home Improvement Credit for HVAC equipment remains active. This covers:
• Heat pumps (air-source): 30% of costs, up to $2,000 per year
• Heat pump water heaters: 30% of costs, up to $2,000 per year
• Central air conditioners: 30% of costs, up to $600
• Furnaces and boilers (natural gas, propane, oil): 30% of costs, up to $600
• Electrical panel upgrades: 30% of costs, up to $600 (when installed with qualifying equipment)
• Home energy audits: up to $150
The credit resets every year. That means you don’t have to do everything at once. Install a heat pump this year, claim $2,000. Upgrade your water heater next year, claim another $2,000.
How to Claim the Credit
File IRS Form 5695 (Residential Energy Credits, Part II) with your tax return. Keep all receipts and manufacturer documentation. Starting in 2026, you’ll need the manufacturer’s PIN number for qualifying equipment — ask your installer for this before they leave.
State Rebates Are Coming Too
The IRA also created two rebate programs — Home Efficiency Rebates (HER) and Home Electrification and Appliance Rebates (HEAR) — that are rolling out state by state in 2025-2026. These can stack on top of the federal tax credit for income-eligible households. Check your state energy office for availability.
Sources: IRS.gov Energy Efficient Home Improvement Credit; ENERGY STAR Federal Tax Credits page; ACDirect.com analysis of 2026 HVAC credits. This article is for informational purposes only.
