Heat Pump Rebates in 2026: What’s Left After the Federal Credit Ended
The federal 25C heat pump credit ended December 31, 2025. State HEAR/HOMES programs, utility rebates and local incentives remain — here’s how to find what you can actually claim in 2026.
If a 2026 heat pump quote still subtracts a $2,000 federal tax credit, it is using a program that no longer exists. The 25C credit — up to 30% of project cost, capped at $2,000 for heat pumps — ended for systems placed in service after December 31, 2025. What remains is a patchwork of state and utility programs.
What ended vs what remains
| Incentive | Status in 2026 | Typical value |
|---|---|---|
| Federal 25C heat pump credit | Ended Dec 31, 2025 | Was up to $2,000 |
| State HEAR / HOMES rebates | Varies by state — some launched, some still planning | Often $2,000–$8,000+ for qualifying households |
| Utility heat pump rebates | Available in many service territories | ~$500–$1,500 typical |
| Local / municipal programs | Sporadic | Varies |
| Income-qualified programs | Often the largest, with eligibility limits | Can cover a large share of project cost |
Example: New Jersey’s Whole Home rebates reach up to $7,500, with utility rebates of roughly $500–$1,400. Texas, by contrast, has not yet launched its HEAR rebates as of 2026. The difference between states is larger than the difference between heat pump brands.
How to check what you can claim
- State energy office — confirm whether HEAR/HOMES is open and whether your address or income qualifies.
- DSIRE — search federal, state and utility programs for your ZIP and technology.
- Your utility — ask about heat pump rebates, load-management programs and income tiers.
- Contractor quote — demand a line-item that does not assume the expired federal credit, and ask which programs they will file for.
Quote red flags
- “$2,000 federal credit” still subtracted in 2026.
- Rebate amounts promised before eligibility or funding is confirmed.
- No mention of equipment eligibility lists (efficiency thresholds, HSPF2/SEER2 minimums).
- Contract requires signing before rebate reservation — sequencing can forfeit eligibility.
After you know your rebate, subtract it from the heat pump cost and see how annual costs and 15-year totals compare with gas or propane.
Quick answers
Can I still get a federal heat pump tax credit for a 2025 install?
If the system was placed in service in 2025, you may still claim 25C on your 2025 return, subject to the rules in effect. Talk to a tax professional about your specific documentation.
Do heat pump rebates count as taxable income?
Utility rebates that reduce the purchase price generally are not taxable income for the homeowner. Tax treatment can vary by program type — confirm with a tax professional for large incentives.
Sources
- IRS — Energy Efficient Home Improvement Credit (25C)
- Rewiring America — 25C heat pump credit status
- Trane — DOE Home Energy Rebates (HEAR/HOMES)
- NuWatt Energy — New Jersey heat pump rebates and cost comparison (2026)
- DSIRE — State and utility incentive database
Status checked November 2026. Program availability changes; verify with the administrator.