What ended2025 installsWhat still helpsFAQ
What Ended
The One Big Beautiful Bill Act, signed July 4, 2025, ended two federal credits that homeowners used for HVAC upgrades:
- Energy Efficient Home Improvement Credit (Section 25C) – covered 30% of qualifying heat pumps (up to $2,000) and efficient AC, furnaces and boilers. It ended for property placed in service after December 31, 2025.
- Residential Clean Energy Credit (Section 25D) – covered 30% of geothermal heat pump systems. It ended for expenditures made after December 31, 2025, and the IRS treats an expenditure as made when installation is complete.
So for equipment installed in 2026, neither federal credit is available.
If Your System Was Installed in 2025
If qualifying equipment was installed and in service by December 31, 2025, you may still be able to claim the credit on your 2025 federal return (IRS Form 5695). Keep your invoice and the manufacturer’s certification for the equipment, and check with your tax preparer.
What Still Helps in 2026
- PSEG Long Island rebates on qualifying heat pumps – see how the rebate program works
- Income-eligible programs such as PSEG Long Island Home Comfort Plus and NYSERDA EmPower+
- New York State incentives for geothermal – check current state tax credit terms with your tax preparer
This page is general information, not tax advice. Talk to a tax professional about your situation.
Tax Credit FAQ
Can I still get the federal heat pump tax credit in 2026?
No. The Section 25C credit ended for heat pumps and other qualifying equipment placed in service after December 31, 2025.
I signed a contract in 2025 but the install finished in 2026. Do I qualify?
Generally no. For these credits, the timing is based on when the equipment is installed and in service – not when you signed or paid a deposit. Confirm with your tax preparer.
Is there any federal credit for geothermal in 2026?
No. The Section 25D residential clean energy credit, which covered geothermal heat pumps, ended for expenditures made after December 31, 2025.
A salesperson quoted me a federal tax credit on a 2026 install. Is that right?
Be cautious. Unless the law changes again, federal HVAC credits don’t apply to 2026 installations. Ask them to put the incentive details in writing and check them yourself.
Plan Around the Incentives That Still Exist
Call or text (516) 930-5483, or email cs@hicksvillehvac.com. We’ll help you check current PSEG Long Island rebates for your system.