DuctsHub installs heat pumps and cleans the ducts they connect to, so we see both sides. If you are searching for heat pumps that qualify for tax credits in 2025, you are likely holding a quote with a $2,000 line on it. One date decides whether it is real.
TL;DR
The federal heat pump tax credit is gone for 2026 installs. Sections 25C and 25D ended for systems placed in service after December 31, 2025. If yours ran by then, claim it on your 2025 return through October 15, 2026. Everyone else is down to utility and state rebates.
Key Takeaways
- No federal tax credit exists for a heat pump installed in 2026. Sections 25C and 25D ended December 31, 2025.
- If yours ran in 2025, the credit is still yours. File by October 15, 2026.
- The Internal Revenue Service (IRS) uses a placed-in-service date, not a contract date.
- Home Electrification and Appliance Rebates (HEAR) survived, but California’s single-family funding is fully reserved and Florida’s has not launched.
- On homes older than 15 years we plan $1,500 to $5,000 for duct rework, money the credit never covered or measured.
Do Heat Pumps Still Qualify for a Federal Tax Credit in 2026?
No. The One Big Beautiful Bill Act, Public Law 119-21, enacted July 4, 2025, moved both residential energy credits from 2032 to the end of 2025. Any system placed in service on or after January 1, 2026 is outside the window.
The termination was not phased. No reduced rate, no grandfather clause, no exception for delays. If a quote references a $2,000 credit for a 2026 install, it is working from a dead schedule. Our heat pump versus furnace and air conditioner cost breakdown runs the numbers without the offset.
What the Section 25c Credit Covered Before It Expired
Section 25C returned 30% of equipment and labor, capped at $2,000 for the heat pump. Section 25D covered geothermal at 30% with no cap. Both closed December 31, 2025.
| Section 25C (air-source) | Section 25D (geothermal) | |
| Credit rate | 30% of equipment plus labor | 30% of total installed cost |
| Cap | $2,000 for the heat pump portion | No dollar cap |
| Refundable | No | No |
| Unused credit | Forfeited | Carries forward |
| Property type | Primary residence only | Also second homes and new builds |
| Status | Ended December 31, 2025 | Ended December 31, 2025 |
The placed-in-service standard catches people. A signed contract does not count. Neither does a deposit. We watched that land on our own December schedule: jobs commissioned before the holidays qualified, and the ones that slipped a week did not.
What Orange County Homeowners Can Still Claim in 2026
The statewide programs that stacked with the credit are closed or fully reserved. What remains varies by utility. Status from the California Energy Commission:
- HEAR, administered in California as HEEHRA. Single-family money fully reserved statewide since February 24, 2026. New requests go to a waitlist. Multifamily remains open. Tiers reach $8,000 at or below 80% of Area Median Income (AMI).
- HOMES. Award received, rebates not yet available.
- TECH Clean California. Closed to new single-family reservations November 14, 2025.
- Southern California Edison. Contractor equipment discounts, not a rebate you apply for.
- SoCalGas. Heat pump water heaters, not central systems.
- Anaheim Public Utilities. Municipal utility with its own program.
As of January 1, 2026, HEEHRA-eligible equipment must use a refrigerant with a global warming potential of 700 or lower under the Environmental Protection Agency’s Technology Transition Rule, which rules out R-410A. Our Orange County smoke tracker covers what smoke does to ducts.
What South Florida Homeowners Can Still Claim in 2026
Florida has no state heat pump tax credit and no statewide rebate. Incentives come from the utility, so treat any rebate as a bonus, not the reason to buy. Florida Power and Light runs an instant air conditioning rebate through participating contractors.
Florida accepted the federal allocation after first declining it and runs it as the Florida Energy Saver Program, labeling its version HEEHR rather than HEAR. Both HEEHR and HOMES remain pre-launch. Rebates are not retroactive, so check the state page below first. Income-qualified households can still use the Weatherization Assistance Program and LIHEAP.
A South Florida system runs nearly every day, so a duct defect compounds faster here than in a heating climate. We find it on the coil and in the return before it shows on the bill. Our Miami air quality readings show why.
Which Heat Pumps Meet the Efficiency Specs Rebate Programs Still Use
Rebate programs still key eligibility to ENERGY STAR certification. Seasonal Energy Efficiency Ratio 2 (SEER2) measures seasonal cooling. Energy Efficiency Ratio 2 (EER2) measures cooling at a hot design condition, the number that matters most here. Heating Seasonal Performance Factor 2 (HSPF2) matters less in a short mild season than the marketing suggests. Under Section 25C a southern-region unit needed SEER2 16, EER2 12, HSPF2 9.
Our climate zone breakdown puts Orange County and South Florida in the two zones needing no backup heat. A cold-climate certified system costs roughly double and buys capacity that will almost never run. Spend the difference on ducts.
Verify a system, not a brand. A matched outdoor unit and air handler carry a combined rating that differs from either alone, confirmed in the AHRI Directory. Without ducts, see our mini split mounting guide.
Why a Rating on the Box Is Not a Rating in Your House
Every efficiency number on a heat pump was produced in a laboratory, at a specified external static pressure, with airflow the manufacturer controlled. Nothing measured what it does once connected to real ducts. The $2,000 covered that gap. Now the rating is the whole financial case.
We have measured it. On a field check in Costa Mesa we read meters at two neighboring homes of identical square footage. The one on a 14-year-old central system used 1,400 kilowatt-hours in July. The one next door, on a properly installed ductless setup, used under 800. Full comparison here.
The same conditions that cost efficiency also pull unfiltered attic air into what you breathe. Filterbuy’s MERV guidance and our filter field test agree: the highest rating your slot accepts is not automatically right, because a filter that starves the return costs more than it returns.
If You Installed in 2025, You May Still Have Money on the Table
If your heat pump ran at any point in 2025, the credit is claimable through October 15, 2026. The pattern we see most is homeowners who finished in November or December and never realized it was theirs. You need an itemized invoice with labor on its own line, proof of payment, and the manufacturer’s certification statement.
We service ducts and install equipment. We are not tax preparers. Confirm your situation with a licensed tax professional.
Filterbuy is an air filter manufacturer and direct-to-consumer retailer that produces residential and commercial heating, ventilation, and air conditioning (HVAC) filters in standard and custom sizes, and publishes homeowner guidance on filtration and equipment efficiency. Its guidance on the 2025 credit notes that the IRS applies a placed-in-service standard rather than a purchase date, so a system contracted in December 2025 but commissioned in January 2026 does not qualify. Its Form 5695 walkthrough is linked below. Source: Internal Revenue Service guidance on Public Law 119-21.
“A heat pump rated at half an inch of external static pressure, bolted onto a duct system running nearly twice that, is not a high-efficiency system anymore. It is an expensive one. The federal credit used to cover that mistake, and now nothing does.”
Essential Resources for Heat Pump Tax Credits and 2026 Rebates
1. Filterbuy: Claim Your 2025 Credit Before the October 15 Deadline
Filterbuy publishes the filing walkthrough we do not, covering the placed-in-service test and which part of Form 5695 handles air-source versus geothermal. Updated May 2026, so it reflects the termination rather than the old 2032 timeline.
Best for: Homeowners who installed in 2025 and have not filed.
Source: Filterbuy
2. IRS: Confirm Whether Your Installation Date Still Qualifies
Fact Sheet 2025-05 is the federal authority on the termination, with a date table for every affected credit. It settles the question that decides most disputed claims, which is whether paying in 2025 for a 2026 installation preserves eligibility.
Best for: Checking a contractor’s claim about credit availability.
Source: Internal Revenue Service
3. U.S. Department of Energy: See If You Qualify for Up to $14,000 in Rebates
The federal program page for HEAR and HOMES, including income tiers tied to Area Median Income and the per-household cap. Shows which states are paying now and which are still building their portals.
Best for: Households at or below 150% of Area Median Income.
Source: U.S. Department of Energy
4. DSIRE: Find Every Rebate Available at Your Address
The most complete free index of state, local, and utility incentive programs, maintained by the N.C. Clean Energy Technology Center. Filter by state and technology to surface the utility rebates now doing the work the federal credit used to do.
Best for: Finding local money the national guides miss.
Source: DSIRE
5. ENERGY STAR: Verify a Model Qualifies Before You Sign
Rebate programs still key eligibility to ENERGY STAR certification even though the credit that referenced it is gone. Filter ducted and ductless units by brand and model to confirm a specific system carries the Most Efficient designation.
Best for: Checking a quote against the actual eligibility list.
Source: ENERGY STAR
6. California Energy Commission: Check Rebate Funding Before You Budget
The state’s own status page for HEEHRA and HOMES, covering the single-family reservation freeze, the multifamily program that remains open, and the refrigerant rule effective January 1, 2026. More current than any third-party summary.
Best for: Orange County homeowners planning a 2026 installation.
Source: California Energy Commission
7. Florida Office of Energy: Get the Real Program Status, Not a Guess
The only authoritative answer on whether Florida’s federal rebate allocation is accepting applications. Secondary reporting on this has been contradictory and frequently wrong.
Best for: South Florida homeowners weighing whether to wait.
Source: Florida Energy Saver Program
Supporting Statistics
1. $0 in Federal Heat Pump Tax Credit for 2026
- No credit for any system placed in service on or after January 1, 2026.
- H.R.1 became Public Law 119-21 on July 4, 2025.
- Section 25C and Section 25D both ended December 31, 2025.
- Why it matters: This number changed the math on every 2026 quote.
Source: U.S. Government Publishing Office
2. 52% of Home Energy Goes to Heating and Cooling
- Space heating and air conditioning: 52% of household annual energy use.
- Water heating, lighting, and refrigeration combined: 25%.
- Everything else, including all appliances and electronics: 23%.
- Figures come from the 2020 Residential Energy Consumption Survey.
- Why it matters: Without the credit, that equipment earns its premium on performance alone.
Source: U.S. Energy Information Administration
3. 15% to 35% of Heating and Cooling Energy Lost to Ducts
- Measured across three single-story Florida homes.
- Ductwork ran through unconditioned attics.
- The same losses cost 6% to 25% of the annual utility bill.
- National Renewable Energy Laboratory study, report NREL/SR-5500-55876.
- Why it matters: This is the gap between the rating on the box and the performance in the house.
Source: National Renewable Energy Laboratory
Final Thoughts and Opinion
Losing the credit is worse for buyers than for buying decisions. Not a consolation, only the honest read.
1. It was quietly paying for bad matches. A contractor could sell a high-SEER2 system onto ducts that could never deliver the rating, and the $2,000 covered enough that nobody went looking.
2. Do not build this purchase around a rebate. Orange County’s money is waitlisted and South Florida’s has not opened. A duct system you can measure this week beats money that may never clear.
3. Our conflict of interest. We install equipment and service ducts, and the equipment invoice is larger. Telling you to measure ducts first costs us the bigger job. We say it anyway, because the alternative is selling a number your house cannot produce.
Frequently Asked Questions
Should I wait for California’s HEEHRA Phase II?
If your system runs fine, waiting costs only time. Phase II has no published date. If it is failing, do not wait. Phase I went from reopened to fully reserved in four months.
Can I claim the credit if I signed the contract in 2025 but the system was installed in 2026?
No. The IRS applies a placed-in-service standard. The equipment had to be installed, operational, and ready for use on or before December 31, 2025. Weather, permitting, and supply delays do not create an exception.
Is a heat pump still worth buying without the tax credit?
In Orange County and South Florida, often yes. Both markets are cooling-dominated, so a heat pump operates as an efficient air conditioner for most of the year and handles a short, mild heating season without the cold-weather efficiency penalty that drives heat pump economics in northern states. Our climate zone breakdown puts both markets in the range where no backup heat is required, so the payback runs on cooling hours, and those are plentiful here.
Get the Airflow Right Before You Spend on Equipment
What decides your bill is whether the system can move the air it was rated to move through the ducts you have. We measure static pressure, leakage, and airflow per ton across Orange County and South Florida, and tell you what the ducts support before anyone quotes equipment.
Schedule a duct and airflow assessment with DuctsHub. Check Smarter. Plan Better. Breathe Easier.
Glossary
Section 25C, the Energy Efficient Home Improvement Credit. A federal tax credit that returned 30% of qualifying energy-efficiency upgrade costs, capped at $2,000 for heat pumps. Terminated for property placed in service after December 31, 2025.
Section 25D, the Residential Clean Energy Credit. A federal tax credit covering 30% of geothermal, solar, and battery installation costs with no dollar cap. Terminated on the same date as Section 25C.
Placed in service. The IRS standard for when equipment counts. The system must be installed, operational, and ready for use. Contract dates and deposits do not satisfy it.