25C: Heat Pump Water Heater Tax Credit
Save money when upgrading to an energy-efficient water heater with a tax credit from the federal government.
Rebate Overview
Overview
The 25C Heat Pump Water Heater Tax Credit is a federal tax credit that covers 30% of the cost of installing a qualifying heat pump water heater, up to a maximum of $2,000. To be eligible, the heat pump water heater must be ENERGY STAR certified and meet the highest efficiency tier set by the Consortium for Energy Efficiency. This credit is available for installations completed before December 31, 2025. Upgrades completed before this date can be claimed on your 2025 tax return, filed in early 2026.
Benefits
Upgrading to a heat pump water heater can make your home more comfortable by providing reliable hot water while reducing energy costs. These systems are more efficient than traditional water heaters, helping to lower your utility bills. Additionally, using a heat pump water heater reduces greenhouse gas emissions, contributing to a healthier environment.
More Information
- Eligibility: Homeowners who install a qualifying heat pump water heater before December 31, 2025, are eligible for this tax credit.
- Claiming the Credit: To claim the credit, complete IRS Form 5695 when filing your 2025 tax return in early 2026.
- Program End Date: The tax credit expires on December 31, 2025.
Details
- Expiration date: December 31, 2025
- Incentive type: Tax Credit
- Amount: $ 2,000
- Maximum Amount: $ 2,000
- Maximum Percent: 30%
- Category: Water Heater Heat Pump
- Link: More details
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