The furnace is 20-some years old, the installer’s quote is on the kitchen counter, and somewhere in your memory is a line from a few years ago: “heat pumps get a 30% tax credit.” Before you count on that money, here is where things stand in 2026, what ended, and where homeowners can still find help paying for a heat pump.
There is no federal heat pump tax credit for a heat pump installed in 2026. The 25C credit (30%, up to $2,000 a year for heat pumps) ended for property placed in service after December 31, 2025. What’s left: state Home Energy Rebates (up to $8,000 for a heat pump, for income-eligible homes in states that have launched them) and utility rebates.
This is general information, not tax or legal advice. Rules, budgets and program status change often; we checked the official pages named below in October 2026. Confirm with the IRS, your state energy office or your utility, and talk to a tax professional about your own return.
Heat pump money in 2026 at a glance
| Program | Who runs it | Status (checked October 2026) |
|---|---|---|
| 25C Energy Efficient Home Improvement Credit | IRS (federal tax credit) | Ended. Not allowed for property placed in service after Dec 31, 2025. Still claimable for qualifying 2025 installs on your 2025 return. |
| Home Electrification and Appliance Rebates (HEAR, called HEEHR on DOE pages) | States, with federal money | Live in some states, closed or fully reserved in others, not launched in others. Income limits apply. |
| Home Efficiency Rebates (HOMES) | States, with federal money | Same: depends on your state. Whole-home projects that cut energy use at least 20%. |
| Utility and state efficiency rebates | Your utility or state program | Many still run; amounts and rules vary by utility. |
| Weatherization Assistance Program | States, with DOE money | For income-qualified households; ask your state or local agency. |
What the 25C heat pump tax credit was, and when it ended
The Energy Efficient Home Improvement Credit, section 25C of the tax code, paid back 30% of the cost of qualifying upgrades to your home. For heat pumps, heat pump water heaters, biomass stoves and boilers, the IRS set the yearly limit at $2,000. Other upgrades (insulation, windows, doors, electrical panels, a home energy audit) shared a separate $1,200 yearly limit, with an audit capped at $150. A heat pump had to meet or exceed the highest efficiency tier set by the Consortium for Energy Efficiency (CEE), not counting any “advanced” tier.
The law signed on July 4, 2025 (Public Law 119-21, often called the One Big Beautiful Bill) moved the end date up. The IRS says it plainly in its fact sheet FS-2025-05 (August 21, 2025): the 25C credit “will not be allowed for any property placed in service after December 31, 2025.” The IRS 25C page, updated April 28, 2026, says you can claim the credit for improvements made through December 31, 2025.
So a heat pump that was finished and working in your home on or before December 31, 2025 can still count, on your 2025 tax return. A heat pump installed on January 2, 2026 cannot, even if you signed the contract in 2025. The date that matters is when the property was placed in service, not when you paid a deposit.
Installed your heat pump in 2025? You can still claim it
If your heat pump went in during 2025 and you haven’t filed (or you’re amending), the credit is still there for that year. What the IRS asks for:
- Form 5695, Part II (Residential Energy Credits) filed with your 2025 return.
- A Qualified Manufacturer Identification Number (QMID) for each item. The IRS says that in 2025, no credit is allowed unless the item was made by a qualified manufacturer and you report its QMID on your return. Ask your installer or the manufacturer for it, and keep it with your invoice.
- Proof the unit met the CEE top tier (the manufacturer’s certificate or the model’s listing), plus your itemized invoice.
- Enough tax to use it. 25C is nonrefundable and, the IRS says, “You can’t apply any excess credit to future tax years.” If your tax bill is smaller than the credit, the rest is lost.
Solar panels and home batteries are a different credit (25D) with different rules, including a carryforward. If you also installed solar in 2025, see how to claim the solar tax credit on Form 5695 and is there a solar tax credit in 2026.
What’s left in 2026: state Home Energy Rebates
The Inflation Reduction Act of 2022 also funded two rebate programs that are separate from tax credits. The Department of Energy (DOE) gave the money to states, territories and Tribes, and each one designs, launches and runs its own program. These rebates were not part of the July 2025 tax changes, but whether you can use one depends entirely on your state.
The Home Electrification and Appliance Rebates (HEAR; DOE’s pages call it HEEHR) are the ones that pay for heat pumps. DOE’s fact sheet lists the most a state can offer per item:
| Upgrade | Up to |
|---|---|
| ENERGY STAR-certified heat pump for space heating and cooling | $8,000 |
| Electrical panel | $4,000 |
| Electrical wiring | $2,500 |
| ENERGY STAR-certified heat pump water heater | $1,750 |
| Insulation, air sealing and mechanical ventilation | $1,600 |
| ENERGY STAR-certified heat pump clothes dryer | $840 |
| ENERGY STAR-certified electric stove, cooktop, range or oven | $840 |
| Total per household | $14,000 |
Only households earning less than 150% of their area median income (AMI) can qualify. DOE says the rebates cover up to 100% of costs for lower-income families (under 80% of AMI in the states we checked) and up to 50% for moderate-income families (80% to 150% of AMI). Your state decides which products count and how the rebate is paid; many pay it through an enrolled contractor, so you never see a check.
The Home Efficiency Rebates (HOMES) are for whole-home projects that reduce your home’s energy use by at least 20%. DOE says all incomes are potentially eligible, with the biggest rebates for lower incomes, up to $8,000 depending on income and modeled savings. A heat pump can be part of a HOMES project.
Where the state rebates stand (what we confirmed)
DOE’s own page says only that the rebates “are now available in select states” and tells people to contact their state energy office. It does not publish a current list, so we checked state pages one by one. This is not every state; it’s the ones we could confirm on an official page in October 2026.
| State | What the official page says |
|---|---|
| North Carolina | Energy Saver North Carolina (HEAR and HOMES) is available in all 100 counties, announced February 10, 2026. Up to $8,000 for a heat pump. energysavernc.org. |
| Wisconsin | Focus on Energy’s HEAR program is accepting applications for households at or under 150% of AMI, up to $14,000. Since September 1, 2026 it no longer accepts retail post-purchase or instant-discount requests for equipment replacing fossil-fuel appliances. |
| New York | HEAR incentives are offered to income-eligible New Yorkers through NYSERDA’s EmPower+ program. The EmPower+ page lists up to $10,000 for an air-source or ground-source heat pump, paid from state funds. |
| California | Single-family HEEHRA heat pump rebates have been fully reserved statewide since February 24, 2026, with a waitlist. Multifamily rebates were still available. HOMES rebates were not yet available. |
| Oregon | Not launched yet. The Oregon Department of Energy says contractor enrollment opens October 12, 2026 to prepare to launch its two programs. |
If your state isn’t in the table, it doesn’t mean there’s nothing: it means you need to check. DOE’s fact sheet strongly recommends waiting until your state’s program launches before you start a project, because most programs require approval before the work begins.
Utility and state efficiency rebates
For most homeowners above the income limits, the biggest heat pump money in 2026 comes from the utility or the state efficiency program, which existed long before the federal credit and kept running after it ended. Two examples from official pages:
- Efficiency Maine shows a financial example for a heat pump system with two indoor units: a $2,000 rebate at any income, $4,000 for moderate income and $6,000 for low income. Its homepage also advertises a $500 additional heat pump bonus through December 31, 2026.
- NYSERDA EmPower+ (New York) lists up to $10,000 for a heat pump and $5,000 for a heat pump water heater for income-eligible households.
Utility rebates are often a fixed amount per unit or per ton of capacity, and many require a cold-climate model, an ENERGY STAR model, or a contractor from the program’s list. Some utilities also offer a lower electric rate for homes heated by a heat pump. These rules are set utility by utility, so the only reliable source is your utility’s own rebate page.
If your household has a low income, ask your state or local agency about the Weatherization Assistance Program, which DOE funds and states run. DOE’s rebate fact sheet points to it for families who need help now.
How to find heat pump rebates for your home: do these next
- Your state energy office. Search “your state home energy rebates” and open the result on a .gov site (or the program site it links to, like energysavernc.org or focusonenergy.com). Check: is it open, what are the income limits, and does it need pre-approval?
- Your utility’s rebate page. Electric and gas utilities both may offer heat pump rebates. Look for the model requirements and the contractor list.
- DSIRE and the ENERGY STAR Rebate Finder. DSIRE (dsireusa.org, run by the N.C. Clean Energy Technology Center at N.C. State University) lists state and utility incentives; the ENERGY STAR Rebate Finder (energystar.gov/rebate-finder) searches by ZIP code. Use them to find programs, then confirm on the program’s own page.
Don’t lose a rebate: five rules that trip people up
- Apply before the work, when the program says so. Many state and utility programs pay only on projects reserved or approved first. California’s single-family rebates ran out of budget and moved to a waitlist; a reservation is what counts.
- Use an enrolled contractor. Many programs pay only through contractors in their network. Ask the installer, in writing, which programs they are enrolled in.
- Check the model, not the brand. Rebates usually name a certification (ENERGY STAR, cold-climate). Ask for the exact outdoor and indoor model numbers and check them against the program’s list.
- Get it installed properly. Refrigerant lines, 240-volt circuits and panel upgrades are work for a licensed HVAC pro and a licensed electrician, with a permit where required. Most rebates require it, and DIY mini splits only keep their warranty if you follow the maker’s rules.
- Keep everything. Itemized invoice, model numbers, approval emails, permit, photos. Program audits happen.
Is a heat pump still worth it without the tax credit?
For many homes, yes, but the math changed. On a $10,000 system, the old credit was worth up to $2,000; that is gone for 2026 installs. What decides the payback now is the price you’re quoted, what you heat with today (propane, oil and electric resistance heat are usually the most expensive to replace), your climate, your electric rate and any state or utility rebate. A heat pump also replaces your air conditioner, which matters if the old one is near the end of its life. Get two or three quotes, ask each installer for a sizing calculation (a Manual J load calculation), and compare. Our heat pump cost guide and heat pump vs furnace walk through the numbers.
Keep exploring
Start with our heat pumps guide (how they work and whether they’re worth it), then see the best heat pumps for cold climates and the best heat pump water heaters. For every program by state, read home energy rebates: how to find yours, and for other incentives see the EV tax credit in 2026 and smart thermostat rebates. The science behind it is in thermal energy explained and geothermal energy. Browse all tax credit and rebate articles.
Heat pump tax credit questions
Is there a heat pump tax credit in 2026?
No federal one for a heat pump installed in 2026. The IRS says the 25C credit is not allowed for property placed in service after December 31, 2025. What remains are state Home Energy Rebates where your state has launched them, state efficiency programs and utility rebates. A few states may have their own state tax incentives; check your state revenue department.
I signed the contract in 2025 but the heat pump went in in 2026. Do I qualify?
Based on the IRS wording, no: the test for 25C is when the property was placed in service, and anything placed in service after December 31, 2025 is out. The binding-contract rule people hear about applies to electric vehicles, not heat pumps. If your situation is unusual, ask a tax professional.
How much is the HEAR heat pump rebate?
Up to $8,000 for an ENERGY STAR heat pump, within a $14,000 household total, according to DOE. Lower-income households (under 80% of area median income) can get up to 100% of costs, moderate-income (80% to 150%) up to 50%. Households above 150% of area median income don’t qualify. Your state sets the final rules.
Can I combine a state rebate and a utility rebate?
Often, but not always. Some programs let you stack, others reduce one rebate by the other, and federally funded rebates generally can’t pay for the same cost twice. Each program’s terms say how it works with others. Ask both programs and your contractor before you sign.
Does a heat pump water heater still get a credit?
Not a federal tax credit if installed in 2026; it was part of the same 25C credit. HEAR can pay up to $1,750 for an ENERGY STAR heat pump water heater in states that offer it, and many utilities offer their own rebates or instant discounts at stores. See the best heat pump water heaters.
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