Federal heat-pump incentives in 2026: 25C credit & HEAR rebates

The two federal levers for a heat pump — the 25C tax credit and the IRA's HEAR/HOMES rebate programs — changed a lot in 2025–26. Here's the honest, dated picture.

The headline: the federal 25C Energy Efficient Home Improvement Credit expired December 31, 2025. A 2026 install does not qualify for 25C. The IRA rebate money (HEAR/HOMES) survived, but it's delivered state-by-state and most states aren't live yet.
Important — new federal rule (May 2026): Under updated US DOE guidance, the HEAR heat-pump rebate now generally applies only to new construction or homes that already have electric heat (e.g. replacing electric resistance/baseboard or an old electric heat pump). Replacing a gas, propane or oil furnace with a heat pump generally no longer qualifies for the HEAR rebate. States are adopting this on rolling timelines and the exact per-state effective dates are still settling, so confirm your specific eligibility with your state energy office. Your utility's own heat-pump rebates and any state tax credit may still apply regardless. General info as of 2026, not tax advice.

The full federal picture

FEDERAL — as of July 2026, verify current. (1) 25C Energy Efficient Home Improvement Credit: EXPIRED Dec 31, 2025. The One Big Beautiful Bill Act (signed July 2025) repealed it; it previously gave up to $2,000/yr (30% of cost) for a qualifying heat pump. Systems placed in service by 12/31/2025 can still be claimed on the 2025 return via IRS Form 5695; a 2026 install does NOT qualify. (25D residential clean energy credit also ended.) [Rewiring America; IRS; iratracker.org; novoco.com] (2) HEAR (Home Electrification & Appliance Rebates, IRA §50122, a.k.a. HEEHR/HEEHRA) + HOMES (Home Efficiency Rebates, §50121): $8.8B total ($4.5B HEAR + $4.3B HOMES) to state energy offices. This rebate money was NOT rescinded by OBBBA (only the tax credits were). HEAR gives up to $8,000/heat pump, $1,750/HPWH, $4,000/panel, $14,000/household cap; ≤80% AMI = 100% of cost covered, 80–150% AMI = 50%; not available above 150% AMI. HOMES is fuel-neutral/whole-home, up to ~$8,000 (≤80% AMI) tied to modeled/measured energy savings. STATUS: per DOE/Building Performance Association (June 2026), only 12 states + DC have launched a program; 43 states/territories still not live. RECENCY FLAG: on June 1, 2026 DOE issued updated guidance that removes some state-plan requirements and LIMITS replacement of non-electric appliances under HEAR; already-launched states must comply by Aug 31, 2026, and DOE says new/renewed approvals "will take time" — so live programs may change or pause mid-2026. [DOE/BPA "State Home Energy Rebate Programs" factsheet, June 2026; Utility Dive; NASEO] This is general info, not tax advice.

So what can you actually get in 2026?

For a 2026 install, your realistic pathways are state HEAR rebates (where live), state HOMES rebates, and your utility's own heat-pump rebates. All of that is state-specific:

Check your state →

Sources

General information as of 2026 — not tax advice. Federal rules and IRS guidance change; confirm eligibility on IRS.gov and with a tax professional, and check current program status with your state energy office.