25C: Heat Pump Tax Credit
Improve home efficiency and save money with this heat pump tax credit from the federal government.
Rebate Overview
Overview
The 25C Heat Pump Tax Credit is a federal tax credit that helps homeowners save on energy-efficient upgrades. To qualify, the heat pump must meet ENERGY STAR requirements. You can claim up to $2,000 per year for heat pump water heaters and heat pumps. This credit covers 30% of the project cost, with a maximum of $2,000 annually. Upgrades completed before December 31, 2025, can be claimed on your 2025 tax return, filed in early 2026. Due to the termination of the program, you won't be able to claim a credit for other projects in future years. ([quitcarbon.com](https://www.quitcarbon.com/help/how-do-i-claim-the-federal-tax-credit-for-my-heat-pump-water-heater?utm_source=openai))
Benefits
Upgrading to a heat pump can make your home more comfortable and energy-efficient. Heat pumps provide both heating and cooling, reducing your energy bills. They also help the environment by lowering greenhouse gas emissions. Installing a heat pump can increase your home's value and appeal to future buyers. ([quitcarbon.com](https://www.quitcarbon.com/rebates/inflation-reduction-act-eehic-25c-tax-credit-heat-pump?utm_source=openai))
More Information
- The heat pump must be installed in your primary residence.
- The credit applies to both the equipment and installation costs.
- To claim the credit, include the project expense on Part II of Form 5695 when filing your taxes.
- Ensure the heat pump meets ENERGY STAR standards.
- The credit is available for installations completed in 2025 and claimed on your 2025 tax return.
- The tax credits expire after December 31, 2025, spiking demand for this upgrade through the end of the year.
Details
- Expiration date: December 31, 2025
- Incentive type: Tax Credit
- Amount: $ 2,000
- Maximum Amount: $ 2,000
- Maximum Percent: 30%
- Category: Heat Pump
- Link: More details
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