Heating and cooling # how does HVAC tax credit work? There is currently no federal tax credit for a residential heating or cooling system. Sections 25C and 25D both ended for property placed in service after December 31, 2025. The Home Energy Rebates, administered by each state rather than federally, remain active and are where it is worth looking instead. ## Why does this matter? What the federal government currently offers for HVAC — and what expired. ## How often does this answer change? This page is marked volatile, meaning its content depends on rules that change. We re-verify it every 90 days against the primary source and stamp the date above. If that date looks old, treat the figure as suspect and check it against the authority we cite. ## What changed, and when? The short answer is that the federal picture emptied out. For several years there were two credits that applied to comfort equipment, and both ended at once for property placed in service after December 31, 2025. ## What should a bid show you? Three bids rarely quote the same job, so comparing headline price compares three different things. The one that was done properly shows its work, and you can check it line by line: - Model numbers for the outdoor unit, indoor coil, and air handler or furnace. - The **AHRI reference number** for that exact combination. A rating applies to a matched system, not to an outdoor unit on its own. - The SEER2 and, on a heat pump, the HSPF2 of that combination. - The Manual J result the sizing came from. - The measured static pressure and any duct work included. - The permit, and who pulls it. - Labour warranty, separate from parts, and whether registration is required. [The full red-flags checklist](https://hvacbuddy.shop/hiring/). ## Is there any incentive money available? Before you let an incentive influence the decision, check that it exists. **There is currently no federal tax credit for a residential heating or cooling system.** Sections 25C and 25D were terminated by Public Law 119-21, 139 Stat. 72 (July 4, 2025) for property placed in service after 2025-12-31. Much of this industry still advertises "the $2,000 heat pump tax credit". If a proposal offsets its price with that credit, it is using a number that no longer exists, and the difference comes out of your pocket rather than theirs. What does remain are the **Home Energy Rebates** under the Inflation Reduction Act, which are a separate authority administered by each state. These are state-run programs. Whether one is open, what it pays, and who qualifies depends on your state and sometimes on your utility. Check your state energy office and the U.S. Department of Energy's state status page before you assume a rebate applies. Do not let a contractor tell you what you qualify for — verify it with the administering authority. [What expired and what remains](https://hvacbuddy.shop/incentives/federal/). ## Which efficiency numbers can you actually compare? If you are comparing efficiency figures, check which generation they belong to first. On January 1, 2023 DOE changed the test procedure and renamed three metrics: SEER became **SEER2**, EER became **EER2**, and HSPF became **HSPF2**. The current procedure measures at a higher external static pressure, much closer to what equipment meets once installed in a real house on real ductwork. DOE is explicit about the consequence: "Although SEER2, HSPF2, and EER2 ratings are similar to ratings using the original metrics, they are not directly comparable. Compliance with the new standards for each model must be determined based on its measured SEER2, HSPF2, or EER2." In practice: a SEER figure from a 2019 article cannot tell you whether a quote reading SEER2 is good, bad or identical. That is why we publish no conversion factor. We do not publish a SEER-to-SEER2 conversion factor. DOE states that ratings on the new metrics are "not directly comparable" to ratings on the original metrics, and that compliance must be determined from the measured SEER2, EER2 or HSPF2 value. Approximate multipliers circulate widely, but they vary by equipment type and configuration, and using one to compare an old article's number against a number on today's quote is how homeowners end up believing they were offered less efficiency than they were. Compare like with like: ask for the SEER2 figure, and check it against the AHRI certificate. The nationwide minimum for a split-system air conditioner is 13.4 SEER2, and for a split-system heat pump 14.3 SEER2 with 7.5 HSPF2. [What each metric measures](https://hvacbuddy.shop/efficiency/) · [minimums by region and state](https://hvacbuddy.shop/efficiency/standards/). ## How is the right equipment size decided? Nearly every persistent comfort problem traces back to equipment size, and size is decided before the first box arrives. The standard is the ACCA **Manual J** load calculation (ANSI/ACCA 2 Manual J - 2016), which totals the heat gain and loss of your specific house: orientation, window area and type, insulation levels, air infiltration, internal gains, and your local design temperature. What a Manual J is *not*: square feet per ton, and not the old unit's tonnage. The first ignores everything that makes one house different from another. The second assumes whoever sized the old equipment got it right, and propagates their error for another fifteen years. Oversized equipment reaches the setpoint and shuts off before it has dehumidified, so the house ends up cold and clammy at the same time. Every start is also the hardest moment in a compressor's life, so wear accelerates. And you pay for the surplus capacity twice — once to buy it and again to run it. Ask for the completed Manual J in writing, not the claim that one was done. [What it contains and how to read it](https://hvacbuddy.shop/sizing/manual-j/). ## How can you verify any of this yourself? Everything regulatory on this site traces to a primary source and carries the date it was read: DOE for efficiency standards, EPA for refrigerants and Section 608, the IRS for tax credits, and ACCA for load calculation. The sources for this page are listed at the end with the date each was consulted. If you find a different figure elsewhere, check two things before deciding which to believe: whether the page says which generation its efficiency metric belongs to, and whether it carries a visible review date. Most of the outdated content in this category fails both tests. **Jurisdiction notice. **Efficiency standards, refrigerant rules, incentives, and licensing are set federally, by region, and by state, and they change. This page reflects the cited federal sources as of 2026-08-17. Verify before purchasing. ## Related questions - [what HVAC system qualifies for tax credit 2025?](https://hvacbuddy.shop/questions/incentives-federal/what-hvac-system-qualifies-for-tax-credit-2025/) - [what's the best HVAC system for HOMES?](https://hvacbuddy.shop/questions/incentives-federal/what-s-the-best-hvac-system-for-homes/) - [what is the best HVAC system for a home?](https://hvacbuddy.shop/questions/incentives-federal/what-is-the-best-hvac-system-for-a-home/) - [what HVAC qualifies for tax credit?](https://hvacbuddy.shop/questions/incentives-federal/what-hvac-qualifies-for-tax-credit/) - [does new HVAC qualify for tax credit?](https://hvacbuddy.shop/questions/incentives-federal/does-new-hvac-qualify-for-tax-credit/) - [how to get HVAC tax credit?](https://hvacbuddy.shop/questions/incentives-federal/how-to-get-hvac-tax-credit/) - [How correct equipment size is decided](https://hvacbuddy.shop/sizing/manual-j/) - [What SEER2, EER2 and HSPF2 mean](https://hvacbuddy.shop/efficiency/) - [Refrigerants and the phasedown](https://hvacbuddy.shop/refrigerants/) - [Incentives: what expired and what remains](https://hvacbuddy.shop/incentives/) Sources (2) - Internal Revenue Service — [Energy Efficient Home Improvement Credit](https://www.irs.gov/credits-deductions/energy-efficient-home-improvement-credit) (accessed 2026-08-17) - U.S. Department of Energy — [Home Energy Rebates Program](https://www.energy.gov/cmei/scep/home-energy-rebates-program) (accessed 2026-08-17) By [HVACBuddy Editorial Team](https://hvacbuddy.shop/authors/editorial-team/). Last reviewed: 2026-08-18. Verified: 2026-08-17 ## Also asked as - how does the HVAC tax credit work? HVACBuddy publishes independent information. We do not install or service equipment, we do not dispatch contractors, and we do not sell leads. Nothing here is engineering, tax, or legal advice.