Heat Pump Tax Credit 2026: What Changed & What's Left

Last updated: September 30, 2026 · Sources verified

Quick answer: The federal heat pump tax credit (Section 25C: 30% of the cost, up to $2,000 a year) is gone for systems installed after December 31, 2025. The One Big Beautiful Bill Act (Public Law 119-21, signed July 4, 2025) ended it early. If your heat pump was installed in 2025, you can still claim the credit on your 2025 return with IRS Form 5695. For installs in 2026, the main federal help left is the HEAR and HOMES rebates, which each state runs on its own and which are only open in some states. Under DOE’s updated rules, HEAR no longer pays to replace gas, oil, or propane equipment (details).

If you were counting on the tax credit to pay for part of a new heat pump, this guide explains exactly what changed, how to claim the credit if your system went in during 2025, what the HEAR and HOMES rebates pay, and where they stand in your state.

What happened to the heat pump tax credit?

Until the end of 2025, the Energy Efficient Home Improvement Credit (Section 25C) covered 30% of qualified costs: up to $2,000 a year for heat pumps and heat pump water heaters, plus up to $1,200 a year for other upgrades such as insulation, windows, and doors (IRS).

The One Big Beautiful Bill Act, signed July 4, 2025, moved the end date forward. The IRS confirms the credit is not allowed for any property placed in service after December 31, 2025 (IRS FAQ).

Geothermal heat pumps lost their credit too. The Residential Clean Energy Credit (Section 25D) covered 30% of the cost with no dollar limit (IRS), but it isn’t allowed for expenditures made after December 31, 2025, and the IRS treats an expenditure as made when installation is completed, not when you pay (IRS FAQ).

Credit	What it covered	Status for systems installed in 2026
Section 25C, Energy Efficient Home Improvement Credit	30% of air-source heat pump costs, up to $2,000 a year	Ended: not allowed for property placed in service after Dec. 31, 2025 (IRS)
Section 25D, Residential Clean Energy Credit	30% of geothermal heat pump costs, no dollar limit	Ended: not allowed for expenditures made after Dec. 31, 2025 (IRS)

What this means for you: the date that counts is when the system was installed, not when you signed the contract or paid a deposit. A heat pump paid for in December 2025 but installed in January 2026 doesn’t qualify.

Installed a heat pump in 2025? You can still claim it

File Form 5695 with your 2025 return. You claim the credit for the tax year the system was installed (IRS: Form 5695).
Get the QMID. For property placed in service in 2025, the credit requires the manufacturer’s Qualified Manufacturer Identification Number (QMID) on your return (IRS). Ask your installer or the manufacturer for it.
Keep your paperwork. Save the invoice showing the equipment, the costs, and the installation date.

Already filed without claiming it? You can file an amended return (Form 1040-X). The IRS generally allows this within 3 years after you filed the original return or 2 years after you paid the tax, whichever is later (IRS). Filed an extension? The extended deadline is October 15 (IRS).

This is general information, not tax advice. If your situation is complicated, check with a tax professional.

What’s still available in 2026: HEAR and HOMES rebates

Two federal rebate programs are still paying out in some states: HEAR (Home Electrification and Appliance Rebates, formerly called HEEHRA) and HOMES (often called Home Efficiency Rebates). They aren’t tax credits. The money comes through a program run by your state energy office, and each state sets its own launch date, application process, and list of approved contractors (U.S. Department of Energy).

HEAR: rebates for electric upgrades, based on income

HEAR pays a share of the cost of specific electric upgrades, including heat pumps. How much of the cost it covers depends on your household income compared with your area median income (AMI) (42 U.S.C. § 18795a).

Household income	HEAR covers
Below 80% of AMI	Up to 100% of the project cost
80% to 150% of AMI	Up to 50% of the project cost

Each upgrade also has its own cap (42 U.S.C. § 18795a):

Upgrade	Maximum rebate
Heat pump for space heating and cooling	$8,000
Heat pump water heater	$1,750
Electric panel (load service center)	$4,000
Electric wiring	$2,500
Insulation, air sealing and ventilation	$1,600
Electric stove, cooktop, range or oven; heat pump clothes dryer	$840
Maximum per household	$14,000

Example: a household at 120% of AMI that replaces electric baseboard heat with a $16,000 heat pump could get up to 50% of the cost, which is $8,000, and $8,000 is also the heat pump cap. A household below 80% of AMI with the same project could also get up to $8,000, because the cap applies even when the rebate covers 100% of the cost. Your state program decides the final amount.

New in 2026: no more fuel switching under HEAR. Under DOE’s updated guidance, HEAR rebates can no longer pay to replace gas, oil, propane, or other fossil-fuel appliances. They can still pay to replace existing electric equipment, such as electric baseboards, an electric furnace, or an old heat pump, with a more efficient model, and insulation and air sealing may be required alongside a heat pump project (NC DEQ). Some state-funded programs, like Clean Heat Rhode Island, still pay for switching from fossil fuels, so check your state’s page.

HOMES: rebates for whole-home energy savings

HOMES pays based on how much energy a whole-home project saves, not on specific equipment, so a heat pump can be part of a larger project with insulation or air sealing. Households of any income can qualify, and households below 80% of AMI can receive more (42 U.S.C. § 18795).

Modeled energy savings	Standard rebate	Household below 80% of AMI
20% to 35% modeled savings	lesser of $2,000 or 50% of project cost	lesser of $4,000 or 80% of project cost
35% or more modeled savings	lesser of $4,000 or 50% of project cost	lesser of $8,000 or 80% of project cost

The law also allows a “measured savings” version that pays per unit of energy actually saved. Which versions your state offers is up to the state program.

Where the programs stand

The Department of Energy says the rebates are available only in select states and sends homeowners to their state or territory energy office for details (DOE). Status really does vary. In California, single-family HEAR rebates have been fully reserved since February 24, 2026, with new requests on a waitlist, and HOMES isn’t available yet (California Energy Commission). In Georgia, HEAR submissions are paused until further notice (Georgia Home Energy Rebates).

Federal rules are still moving, too. At the end of May 2026, the Department of Energy issued updated guidance for both programs (Program Notices 26-1 and 26-2), which states must apply by September 1, 2026 (NC DEQ). Several states are revising their programs before launching.

Before you sign a contract, confirm your state’s status and rules. Many programs require approval or an approved contractor before work starts, so installing first can cost you the rebate.

Heat pump rebates by state

Find your state below. Where we haven’t verified a program’s status yet, check directly with the agency that runs it: NASEO: State Energy Offices lists every state energy office. We’re adding detailed state guides over the coming weeks.

State	HEAR status	HOMES status
Alabama	Not launched yet (source)	Not launched yet (source)
Alaska	Not launched yet (source)	Not launched yet (source)
Arizona	Check with your state energy office	Check with your state energy office
Arkansas	Not launched yet (source)	Not launched yet (source)
California	Fully reserved (waitlist) (source)	Not launched yet (source)
Colorado	Closed (source)	Not launched yet (source)
Connecticut	Not launched yet (source)	Not launched yet (source)
Delaware	Not launched yet (source)	Not launched yet (source)
Florida	Not launched yet (source)	Not launched yet (source)
Georgia	Paused (source)	Open (source)
Hawaii	Not launched yet (source)	Not launched yet (source)
Idaho	Check with your state energy office	Check with your state energy office
Illinois	Not launched yet (source)	Not launched yet (source)
Indiana	Open (source)	Open (source)
Iowa	Check with your state energy office	Check with your state energy office
Kansas	Not launched yet (source)	Not launched yet (source)
Kentucky	Not launched yet (source)	Not launched yet (source)
Louisiana	Check with your state energy office	Check with your state energy office
Maine	Open (source)	Check with your state energy office
Maryland	Not launched yet (source)	Not launched yet (source)
Massachusetts	Check with your state energy office	Check with your state energy office
Michigan	Open (source)	Open (source)
Minnesota	Not launched yet (source)	Not launched yet (source)
Mississippi	Check with your state energy office	Check with your state energy office
Missouri	Not launched yet (source)	Not launched yet (source)
Montana	Not launched yet (source)	Not launched yet (source)
Nebraska	Check with your state energy office	Check with your state energy office
Nevada	Check with your state energy office	Check with your state energy office
New Hampshire	Not launched yet (source)	Check with your state energy office
New Jersey	Not launched yet (source)	Not launched yet (source)
New Mexico	Open (source)	Check with your state energy office
New York	Open (source)	Check with your state energy office
North Carolina	Open (source)	Open (source)
North Dakota	Open (source)	Open (source)
Ohio	Not launched yet (source)	Not launched yet (source)
Oklahoma	Check with your state energy office	Check with your state energy office
Oregon	Not launched yet (source)	Not launched yet (source)
Pennsylvania	Not launched yet (source)	Not launched yet (source)
Rhode Island	Check with your state energy office	Check with your state energy office
South Carolina	Check with your state energy office	Check with your state energy office
South Dakota	Check with your state energy office	Check with your state energy office
Tennessee	Check with your state energy office	Check with your state energy office
Texas	Not launched yet (source)	Not launched yet (source)
Utah	Paused (source)	Paused (source)
Vermont	Check with your state energy office	Check with your state energy office
Virginia	Not launched yet (source)	Not launched yet (source)
Washington	Not launched yet (source)	Not launched yet (source)
West Virginia	Check with your state energy office	Open (source)
Wisconsin	Open (source)	Open (source)
Wyoming	Check with your state energy office	Check with your state energy office

Other ways to lower the cost in 2026

Utility rebates. Many electric and gas utilities run their own heat pump rebates, separate from HEAR and HOMES. Check your utility’s website or call them.
State and local programs. DSIRE: Database of State Incentives for Renewables & Efficiency lists incentives by state and ZIP code.
Right-size the system. A proper load calculation avoids paying for more capacity than you need. See how heat pumps work and what they cost.
Compare quotes. Get at least three written quotes for the same size and efficiency so you’re comparing like for like.

Frequently asked questions

Is there a federal tax credit for heat pumps in 2026?

No. The Section 25C credit isn’t allowed for heat pumps placed in service after December 31, 2025, and the Section 25D credit for geothermal heat pumps ended for installations completed after that date (IRS).

I installed a heat pump in 2025. How do I claim the credit?

File IRS Form 5695 with your 2025 tax return and include the manufacturer’s QMID for the heat pump. The credit is 30% of qualified costs, up to $2,000 for heat pumps (IRS).

I already filed my 2025 taxes and forgot the credit. Is it too late?

Usually not. You can file an amended return, generally within 3 years after filing the original return or 2 years after paying the tax, whichever is later (IRS).

What’s the difference between HEAR and HOMES?

HEAR pays for specific electric upgrades, like a heat pump (up to $8,000), and is limited to households at or below 150% of area median income. HOMES pays based on the energy savings of a whole-home project and is open to any income, with higher amounts below 80% of AMI.

Can HEAR pay to replace my gas furnace with a heat pump?

Not anymore. Under DOE’s updated guidance, which states must apply by September 1, 2026, HEAR rebates can’t be used to replace gas or other fossil-fuel appliances. They can still help replace existing electric heating with a more efficient heat pump (NC DEQ).

How do I know if HEAR or HOMES is open in my state?

Check the table above or contact your state energy office. The Department of Energy lists programs as available only in select states (DOE).

Can I get a rebate for a heat pump I already installed?

Only if your state’s program allows it. Many programs require approval before installation, so check with your state energy office before assuming you qualify.