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 in mid-2025, 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 home energy rebate program is on hold until further notice. 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) 997-8909. 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 IRS states the credit covers improvements installed through December 31, 2025.
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.
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, the credit belongs on your 2025 tax return — the IRS says you claim it for the tax year the property is installed.
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. For equipment installed in 2025, the IRS also requires the manufacturer’s Qualified Manufacturer Identification Number (QMID). If you already filed your 2025 return without the credit, ask your tax preparer about an amended return.
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. If you’re still choosing a contractor, these are the questions worth asking before you replace.
What About Geothermal Heat Pumps?
Geothermal heat pumps were covered by a different credit, Section 25D (the Residential Clean Energy Credit). The IRS says that credit isn’t available for anything placed in service after December 31, 2025, either.
Geothermal systems use a ground loop buried in your yard or under your driveway.
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.
Rocky Mountain Power’s Wattsmart program does pay up to $2,000 on qualifying ground-source heat pumps for its electric customers.
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 on hold.
Rocky Mountain Power Wattsmart Rebates
This is your go-to program if you’re upgrading HVAC equipment in 2026 and you buy your electricity from Rocky Mountain Power. (Some cities, such as Lehi, run their own power company, and their residents can’t use Wattsmart.)
Wattsmart’s Utah heating and cooling rebates include: dual-fuel heat pumps (a heat pump paired with a gas furnace), $700 to $1,450; ducted air-source heat pumps, $450 when replacing an existing electric heat pump or $1,200 to $1,600 when replacing electric resistance heat (homes heated by gas don’t qualify); ductless heat pumps, $600 to $1,700; ground-source heat pumps, up to $2,000; duct sealing and insulation, $100 to $400; smart thermostats, $75; and furnace fan motor (ECM) upgrades, $100. There’s no Wattsmart rebate in Utah for a central air conditioner on its own.
Most require an existing home and a program-participating contractor (Ninja is listed in Wattsmart’s contractor directory as an HVAC contractor). Amounts depend on efficiency ratings and on what the new equipment replaces, and Rocky Mountain Power can change them with 45 days’ notice, so check current figures at wattsmarthomes.com.
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.
Applications go through Wattsmart’s online portal within 180 days of installation, and the program says rebates are issued within 14 business days of approval. Depending on how your quote is set up, the Rocky Mountain Power rebate may come off your invoice; otherwise we file what we can and guide you through the rest.
Enbridge Gas ThermWise Rebates
If your home is heated by natural gas from Enbridge Gas, its 2026 ThermWise program (existing homes, equipment installed January 1 through December 31, 2026) lists: high-efficiency gas furnaces, $300 (95% to 97.4% AFUE) or $350 (97.5% AFUE or higher with an ECM motor); dual-fuel systems (a qualifying heat pump with a 95%+ AFUE gas furnace), $700 to $1,200; smart thermostats, $50 or $75; and gas water heaters, $100 to $350. Rebate requests must be postmarked within six months of installation. Check current details at enbridgegas.com.
Utah’s State Home Energy Rebates (On Hold)
Utah’s Office of Energy Development says the state’s Home Energy Rebate program is on hold until further notice. Utah applied to the U.S. Department of Energy in December 2024, and no program money will be distributed until federal approval comes through. There’s no launch date, so don’t plan a replacement around it.
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) 997-8909 — we can run the numbers based on your home size and heating costs.
What Should You Do Right Now?
Even though the federal HVAC tax credits are gone, 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 with no launch date 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. Keep it maintained and price your options now, so you can replace it on your schedule instead of after a failure.
Building new or remodeling: If you’re building or doing a gut remodel, look at geothermal. 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
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 2025 tax return — the IRS says the credit goes on the return for the year the property was installed. 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 covered geothermal heat pumps and solar installs; the IRS says it also isn’t available for property placed in service after December 31, 2025. They use different IRS forms and apply to different equipment types.
Does Rocky Mountain Power offer HVAC rebates?
Yes, if you buy your electricity from Rocky Mountain Power. For heating and cooling, its Wattsmart program pays rebates on heat pumps (including dual-fuel systems), duct sealing, smart thermostats and furnace fan motors — but not on a central air conditioner on its own. Most require a program-participating contractor, and applications are due within 180 days of installation.
When will Utah’s state home energy rebate program launch?
There’s no date. Utah’s Office of Energy Development says the program is on hold until further notice: the state applied to the U.S. Department of Energy in December 2024, and no program money will be distributed until federal approval is granted.
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 while Utah’s state rebate program is on hold 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 and Enbridge Gas’s rebates are available right now. If your system is on its last legs, replace it soon with the most efficient option you can afford and claim any utility rebate it qualifies for.
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, give us a call at (801) 997-8909. 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.
Need help? Learn more about our HVAC installation services or call us at (801) 997-8909.
