If you’re researching HVAC federal tax credits 2026, we’ve got tough news: the credit expired on December 31, 2025. When we wrote about federal energy rebates last summer, Section 25C was still active. Things changed at midnight on New Year’s.
But here’s the good news. Homeowners in Utah still have options to save on HVAC upgrades. Rocky Mountain Power’s Wattsmart program offers rebates right now � no waiting.
The state’s HOMES rebate program is approved for $101 million in federal funding but hasn’t launched yet. And even without tax credits, heat pumps still pay for themselves within 5 to 8 years.
We’ll walk through what happened to the federal credit, what you can still claim if you installed equipment by December 31, 2025, and what Utah-specific options exist today. We’ve been installing HVAC systems across the Wasatch Front for 20+ years, so we’ve helped dozens of homeowners through these kinds of program changes.
If you’re confused about what you qualify for right now, give us a call at (801) 997-1617. We track Utah rebate programs so you don’t have to.
What Happened to HVAC Federal Tax Credits 2026?
The Energy Efficient Home Improvement Credit � known as Section 25C � was part of the Inflation Reduction Act. It offered up to $2,000 for qualifying heat pumps, $600 for high-efficiency air conditioners or furnaces, and a $3,200 total annual cap across all efficiency improvements.
The program was designed to run through 2032, but Congress never fully extended it past 2025. On January 1, 2026, Section 25C expired. The IRS website confirms the credit ended on that date.
What made the credit valuable wasn’t just the dollar amount. It was the fact that HVAC upgrades account for a huge chunk of your home’s energy use. The Department of Energy reports that heating and cooling make up 31% of home electricity use. A $2,000 credit on a heat pump installation (typically $18,000-$36,000 for a full dual-fuel system) made efficiency upgrades far more affordable.
Why did it expire? The short answer is that Congress didn’t act. The Inflation Reduction Act included sunset provisions for certain tax incentives. When lawmakers didn’t act to extend those provisions, the credits lapsed.
Can You Still Claim the Credit in 2026?
Yes � but only if you installed your system by December 31, 2025.
Here’s how the timeline works. If you installed a qualifying heat pump, air conditioner, or furnace in 2025, you can claim the credit on your 2026 tax return. You’ll file that return in early 2027. The IRS uses the install date, not the filing date, to check if you qualify.
If you installed equipment on or after January 1, 2026, you can’t claim the federal credit. It’s that simple.
| Install Date | Tax Year | Can Claim Credit? |
| December 30, 2025 | 2025 (filed in 2026) | Yes |
| January 2, 2026 | 2026 (filed in 2027) | No |
What you need to claim the credit: Keep your invoice, the manufacturer’s certification statement (usually included with the equipment), and IRS Form 5695. Your tax preparer will need all three documents.
We’re seeing this a lot right now. Homeowners who replaced systems in November or December 2025 are calling to ask about their paperwork. If that’s you, make sure your contractor gave you the manufacturer’s certification. Without it, the IRS can reject your claim.
One Exception: Geothermal Heat Pumps Still Qualify
Not all HVAC federal tax credits 2026 expired � one exception remains. Section 25D � the Residential Clean Energy Credit � is still active through 2032. It covers geothermal heat pumps at 30% of the total installed cost, with no dollar cap.
The key difference: geothermal systems use a ground loop buried in your yard or under your driveway. Air-source heat pumps (the ones with an outdoor condenser unit) don’t qualify. Only geothermal systems are eligible for the 25D credit.
Geothermal installs in Utah face some challenges. The Wasatch Front has rocky soil and limited yard space, which drives up excavation costs. Typical installations run $25,000 to $40,000.
A 30% credit brings that down to $17,500 to $28,000 out-of-pocket � still a big investment.
Geothermal makes sense for new construction or major remodels, where you’re already digging and can plan around the ground loop. For a standard HVAC replacement, most Utah homeowners stick with air-source heat pumps or dual-fuel systems. You can read more about the differences in our heat pump vs. AC comparison.
What Utah Homeowners Can Get Instead
The HVAC federal tax credits 2026 may be gone, but Utah-specific programs can still reduce your upfront cost. Here’s what’s actually available right now � and what’s coming soon.
Rocky Mountain Power Wattsmart Rebates
This is your go-to program if you’re upgrading HVAC equipment in 2026. Rocky Mountain Power serves most of the Wasatch Front, including Salt Lake, Utah, and Davis counties. Their Wattsmart program offers rebates for qualifying energy-efficient equipment.
Typical rebates range from $100 to $300 for ENERGY STAR-rated systems. The exact amount depends on the equipment type and efficiency rating. Requirements are simple: the system must meet ENERGY STAR standards, and installation must be done by a Utah state licensed contractor.
Something Utah-specific to know: altitude affects efficiency ratings. A system that qualifies as ENERGY STAR in Denver might not meet the same threshold in Park City without adjustment. Systems installed above 4,500 feet need to be derated for proper burning and efficiency math.
We’ve been doing this for 20 years in Utah, so we account for altitude when sizing and selecting equipment. We’re excited to help homeowners get systems that actually perform at altitude.
The application process is simple. Your contractor submits the rebate paperwork on your behalf, and Rocky Mountain Power sends you a check within 4 to 6 weeks. No pre-approval needed � just install qualifying equipment and submit.
Utah HOMES and HEEHRA Rebate Programs (Coming Soon)
The state was approved for $101 million in IRA rebates HVAC Utah homeowners can use through two major programs: HOMES (for low- and moderate-income households) and HEEHRA (for all income levels). Both programs will offer big rebates for HVAC upgrades.
HOMES provides up to $8,000 for whole-home energy efficiency changes that achieve at least 20% energy savings. HEEHRA offers up to $8,000 for heat pump installs, $1,750 for insulation, and smaller amounts for other efficiency upgrades.
The catch: Neither program has launched yet as of early 2026. Utah is behind states like Massachusetts and California, which rolled out their programs in 2024.
The delay comes down to admin setup � the state needs to build income verification systems, enroll contractors, and set up application portals.
According to Utah Clean Energy, the unofficial estimate for launch is late 2026 or early 2027.
Should you wait? That depends on your system’s condition. If your furnace or AC is limping along and might fail mid-summer, skip waiting for a rebate program that’s 6 to 12 months out. If your system still works fine and you’re planning ahead, it might be worth the wait.
Heat Pumps Still Pay for Themselves
Even without HVAC federal tax credits 2026, heat pumps remain the most efficient way to heat and cool your home. The U.S. Department of Energy reports that heat pumps reduce electricity use for heating by up to 75% compared to electric resistance heating.
Dual-fuel systems are common here � a heat pump paired with a gas furnace. When temps drop below 20�F, the system switches to gas. This setup handles our sub-zero winters while getting maximum efficiency during spring and fall. For a breakdown of what a furnace replacement costs in Utah, check our furnace installation guide.
Typical savings in the state: $400 to $800 per year, depending on your home’s size, insulation quality, and utility rates. Break-even on a heat pump investment usually happens in 5 to 8 years, even without incentives. And when paired with a programmable thermostat, you can maximize those savings by automatically adjusting temps when you’re asleep or away.
Something to watch for: proper sizing at altitude. Heat pumps work great in Utah, but they need to be sized correctly for both elevation and climate. A contractor who doesn’t understand altitude derating might install a system that underperforms in winter. Our 20+ years serving the Wasatch Front means we’ve dialed in these calculations for homes from Eagle Mountain to Park City.
For more technical details on how heat pumps stack up, check out our heat pump efficiency guide.
Want to know if a heat pump makes sense for your Utah home even without federal credits? Call us at (801) 997-1617 � we can run the numbers based on your home size and heating costs.
What Should You Do Right Now?
Even though HVAC federal tax credits 2026 are gone for standard systems, you still have practical options. Your next step depends on your situation. Here’s how to think through it.
Emergency replacement: Your system failed last night, and you need something installed this week. Skip waiting for rebates. Focus on what’s available now.
Get quotes from licensed contractors, confirm the system qualifies for the rebate, and move forward. Waiting for a program that might launch in 9 months makes no sense when you’re running space heaters in February.
Planning ahead: Your system still works, but it’s 15 years old and you’re thinking about replacement before it dies. If your system can last another 6 to 12 months, it might be worth waiting for Utah’s HOMES program to launch. Keep an eye on Utah Clean Energy for updates. Keep your current system maintained so it doesn’t fail before the rebates arrive.
Building new or remodeling: If you’re building or doing a gut remodel, look at geothermal. The 30% federal credit is still active through 2032, and you’re already digging, which reduces ground loop install costs. Get quotes from contractors experienced with geothermal in Utah � the soil conditions here require specialized knowledge.
Action steps for everyone:
- Check your home’s eligibility for Rocky Mountain Power Wattsmart rebates
- Get at least two quotes from Utah state licensed contractors
- Ask contractors how they account for altitude in efficiency calculations
- Keep all receipts and documents � if Utah’s HOMES program launches with retroactive eligibility, you’ll want your paperwork ready
Don’t pay contractors who promise you can still claim the expired federal credit for 2026 installs. That’s either ignorance or fraud. The credit expired January 1, 2026, and no amount of creative accounting changes that.
For cost context on what a 2-ton AC replacement runs in Utah, we have a detailed breakdown on our site.
Frequently Asked Questions
Can I still claim the HVAC tax credit in 2026?
Only if you installed qualifying equipment by December 31, 2025. You claim it on your 2026 tax return, which you’ll file in early 2027. Use IRS Form 5695 and keep your invoice plus the manufacturer’s certification statement. If you installed equipment on or after January 1, 2026, the federal credit isn’t available.
What’s the difference between Section 25C and Section 25D?
Section 25C covered air-source heat pumps, air conditioners, and furnaces. It expired December 31, 2025. Section 25D covers geothermal heat pumps and solar installs, and it’s still active through 2032 at 30% of total cost with no dollar cap. They use different IRS forms and apply to different equipment types.
Does Rocky Mountain Power offer HVAC rebates?
Yes. Their Wattsmart program provides rebates ranging from $100 to $300 for ENERGY STAR-rated systems installed by a licensed contractor. The program is available now � no waiting. Your contractor typically submits the rebate application on your behalf, and Rocky Mountain Power sends you a check within 4 to 6 weeks.
When will Utah’s HOMES rebate program launch?
The state received approval for $101 million in funding but hasn’t launched the program yet as of early 2026. The unofficial estimate is late 2026 or early 2027. Admin setup is taking longer than in states like Massachusetts or California. The program will offer up to $8,000 for qualifying heat pump installs once it goes live.
Are heat pumps worth it without the federal tax credit?
Yes. Heat pumps still reduce electricity use for heating by up to 75% compared to electric resistance, according to the Department of Energy. Utah sees typical savings of $400 to $800 per year. Payback periods are 5 to 8 years even without federal incentives. Rocky Mountain Power’s Wattsmart rebates help close the gap, and the efficiency savings add up over the system’s 15- to 20-year lifespan.
Moving Forward Without Federal Credits
Yeah, the timing stinks. The HVAC federal tax credits 2026 expiring right when Utah’s HOMES program is still stuck in admin limbo feels like bad luck. We’ve had a lot of homeowners tell us they wish they’d acted in 2025.
But here’s the reality. Efficiency still pays. While HVAC federal tax credits 2026 are no longer available, the math on heat pump savings hasn’t changed.
Heat pumps still save money. Rocky Mountain Power’s rebates are available right now, and Utah’s larger rebate programs are coming. If your system is on its last legs, replace it soon with the most efficient option you can afford and claim the Wattsmart rebate.
We’ve been installing HVAC systems across the Wasatch Front for over 20 years. We understand Utah’s altitude requirements, we track local rebate programs, and we help homeowners figure out what makes sense for their home and budget.
That’s part of being a family-owned company rooted in this community � we genuinely care about helping our neighbors stay comfortable year-round.
Ready to explore your options? Whether you’re replacing a failed system or planning ahead for Utah’s HOMES rebates, give us a call at (801) 997-1617. We’ll help you navigate what’s available and find the right system for your home. And if you want to plan ahead, our Home Health Plan covers tune-ups and keeps your system running efficiently while you wait for rebate programs to launch.
Need help? Learn more about our HVAC installation services or call us at (801) 997-1617.
