Yes, for new installations: the 25C tax credit for a heat pump ended for property placed in service after December 31, 2025. However, if your heat pump went in during 2025, you can still claim 30% of the cost, up to $2,000, on your 2025 return or an amended one.
Information checked on November 4, 2026. This article explains the rules; it isn’t tax advice, so talk to a tax professional about your own return.
What the 25C tax credit for a heat pump covered
The Energy Efficient Home Improvement Credit, known as 25C, paid back 30% of the cost of qualifying upgrades. In addition, it had annual limits rather than a lifetime cap, so homeowners could claim it every year they made improvements, ENERGY STAR explains.
| Upgrade | Credit limit (30% of cost) |
|---|---|
| Heat pumps, heat pump water heaters and biomass stoves or boilers | Up to $2,000 a year combined |
| Windows and skylights | Up to $600 |
| Exterior doors | $250 per door, $500 in total |
| Electric panel upgrade | Up to $600 |
| Home energy audit | Up to $150 |
| All non-heat-pump items together (including furnaces, boilers, central AC and insulation) | Up to $1,200 a year |
| Total for one year | $3,200 |
For 2025, only air-source heat pumps recognized as ENERGY STAR Most Efficient qualified. Also, the home had to be an existing U.S. home, not a new build. Renters who paid for a heat pump could claim it, but landlords couldn’t claim it for homes they didn’t live in.
Finally, the credit is nonrefundable. In other words, it can lower your tax bill to zero, but you don’t get the rest back. According to ENERGY STAR, you can’t carry any excess 25C credit to future years either.
Why the 25C tax credit for heat pumps ended in 2025
The One Big Beautiful Bill Act, signed on July 4, 2025, ended the credit early. As a result, the IRS now says the credit “will not be allowed for any property placed in service after December 31, 2025.” ENERGY STAR’s page likewise says the heat pump credit applies to products “purchased and installed” between January 1, 2023, and December 31, 2025.
So a heat pump installed in 2026 doesn’t qualify, even if you signed the contract or paid a deposit in 2025. As of November 4, 2026, we found no new federal law that brings the credit back. If that changes, we’ll update this page.
How to claim the 25C tax credit for a 2025 heat pump
If your heat pump was placed in service in 2025, you claim the 25C tax credit on IRS Form 5695 with your 2025 federal return. To begin with, you need the manufacturer’s four-digit qualified manufacturer (QM) code. For 2025 installations, ENERGY STAR says including that code is enough, and for heat pumps it applies to the outdoor unit only.
- First of all, gather the itemized invoice, the model numbers and the installation date.
- Then ask your contractor or the manufacturer for the QM code of the outdoor unit.
- After that, calculate 30% of the qualifying cost, capped at $2,000 for heat pumps.
- Finally, complete Form 5695 and attach it to your 2025 return.
For example, a $12,000 heat pump installed in 2025 gives a 30% figure of $3,600. Because of the cap, however, your credit would be $2,000, and only if you owe at least that much in federal income tax.
Forgot the 25C tax credit for your heat pump? File an amended return
If you already filed your 2025 return without the credit, you can amend it with Form 1040-X. The IRS says you generally have 3 years after you filed your original return or 2 years after you paid the tax, whichever is later. If you filed early, the clock starts on the April tax deadline.
Moreover, the IRS says you can file Form 1040-X electronically with tax software, and you can file up to three amended returns for the same year.
Geothermal systems and the 25D credit
Geothermal heat pumps used a different credit, the Residential Clean Energy Credit (25D), worth 30% of the cost. It ended for expenditures made after December 31, 2025. However, the timing rule is stricter, because the IRS treats an expenditure as made when the original installation is complete.
As a result, the IRS says a geothermal system paid for in 2025 but finished in 2026 doesn’t qualify. Unlike 25C, ENERGY STAR says unused 25D credit can be carried forward to later years. Still, the IRS FAQ on the law doesn’t address carryforwards, so ask a tax professional if you have one.
What you can still claim in 2026 instead of the 25C tax credit
Without the 25C tax credit, the remaining help for a new heat pump comes from rebates and financing rather than your tax return:
- HEEHR rebates (formerly HEAR): up to $8,000 for a heat pump for households earning under 150% of the area median income, but only in states that have launched. Since May 29, 2026, new reservations cover only replacements of electric equipment.
- HOMES rebates: $2,000 to $8,000 under federal limits for whole-home projects that cut energy use by at least 20%, where your state runs the program.
- Utility rebates: many utilities pay their own heat pump rebates. For example, Mass Save pays up to $8,500 for a whole-home heat pump in 2026.
- Financing: some utilities and states offer low-interest or 0% loans, such as Mass Save’s HEAT Loan of up to $25,000.
For the full picture, see our guides to heat pump rebates, the HEAR rebate program and HVAC financing. To check what a new system costs, see our heat pump cost guide.
25C tax credit for a heat pump: FAQ
Is the 25C tax credit gone for good?
For now, yes. The IRS says the credit doesn’t apply to property placed in service after December 31, 2025, and we found no law restoring it as of November 4, 2026.
Can I claim 25C for a January 2026 install I paid for in 2025?
No. The cutoff depends on when the heat pump was placed in service, not when you paid. Since a system installed in 2026 wasn’t in service in 2025, it doesn’t qualify.
Do I need a product PIN for a 2025 installation?
For 2025 installations, ENERGY STAR says the manufacturer’s four-digit QM code is enough. For heat pumps, you need the code for the outdoor unit only.
Can renters claim it?
Yes, renters could claim the 25C tax credit for a heat pump installed in 2025 that they paid for. ENERGY STAR says renters who make eligible heat pump improvements can claim it, while landlords can’t claim it for homes they don’t live in.
Is any HVAC equipment still eligible in 2026?
No. The furnace, boiler and central AC credits were part of the same 25C credit, so they ended at the same time. Similarly, the 25D geothermal credit ended for installations completed after 2025.
Sources and review
Sources: IRS, FAQs on the end of energy credits under Public Law 119-21 (FS-2025-05, August 21, 2025); IRS Tax Tip 2026-35, when and how to amend a tax return (April 28, 2026); IRS, file an amended return (reviewed November 2, 2026); ENERGY STAR, federal tax credits for energy efficiency; ENERGY STAR, air-source heat pump tax credit; DOE Program Notice 26-2 (HEEHR) (effective May 29, 2026); ENERGY STAR, HOMES program amounts; Mass Save, air-source heat pump rebates (2026). All checked on November 4, 2026.
Written by: HVAC Switch. Last updated: November 4, 2026. Read our editorial policy to learn how we research prices, or contact us if you spot an error.