Key Facts at a Glance
- 25C status
- Expired — no equipment placed in service after Dec 31, 2025
- 25D status
- Expired — no expenditures after Dec 31, 2025
- Legal basis
- One Big Beautiful Bill Act (P.L. 119-21, July 4, 2025)
- 2025 installs
- Still claimable on your 2025 return via IRS Form 5695
- Federal replacement
- None for 2026 residential HVAC projects
- Status verified
- July 3, 2026, from IRS.gov
What ended, exactly
For years, homeowners could claim the Section 25C Energy Efficient Home Improvement Credit — 30% of qualifying costs, up to $2,000 per year for heat pumps, heat pump water heaters, and biomass equipment, plus up to $1,200 per year for central ACs, water heaters, furnaces, insulation, windows, and energy audits.
The One Big Beautiful Bill Act (Public Law 119-21, signed July 4, 2025) accelerated the credit's termination from its original 2032 sunset. The IRS confirms: the 25C credit is not allowed for any property placed in service after December 31, 2025. The Section 25D Residential Clean Energy Credit (solar, solar water heating, geothermal, battery storage) similarly ended for expenditures made after December 31, 2025.
Installed in 2025? You can still claim it
If your qualifying system was installed and placed in service on or before December 31, 2025, you can still claim the credit on your 2025 federal tax return using IRS Form 5695. The credit is claimed for the year the property was installed — not when it was purchased or paid for. Keep your invoice and the equipment's Qualified Manufacturer identification details, and confirm the specifics with a qualified tax professional; we don't provide tax advice.
So how do Florida homeowners save in 2026?
The savings stack shifted from the IRS to manufacturers, utilities, and the state. For a 2026 high-efficiency A/C, heat pump, or water heater project in our service area, the real, currently claimable money looks like this:
- - Daikin consumer instant rebate: $750–$1,400 on qualifying systems purchased by July 31, 2026
- - FPL residential A/C rebate: $200 instant invoice credit on qualifying SEER2 15.2+ systems installed by a participating contractor
- - Florida HEAR (when it opens): up to $8,000 on heat pumps and $1,750 on heat pump water heaters for income-qualified households — register for launch alerts
- - Lower operating costs: high-efficiency inverter systems cut cooling energy use meaningfully in Florida's long cooling season — a saving no legislation can repeal
Watch out for stale advice
Plenty of pages written before mid-2025 still say "claim your 30% federal tax credit through 2032." That information is out of date. If a contractor builds a 2026 quote around a federal tax credit for a new HVAC system, get a second opinion — we'll show you the incentives that actually exist for your project, in writing.
Official Sources
Don't take our word for it — these are the official program pages this guide was verified against:
Frequently Asked Questions
Is there any federal tax credit for a heat pump installed in 2026?
No. The IRS states the Section 25C credit is not allowed for any property placed in service after December 31, 2025, and no federal program replaced it for residential HVAC. 2026 savings come from manufacturer rebates, utility rebates, and Florida's state rebate programs once they open.
My system was installed in December 2025 — how do I claim the credit?
File IRS Form 5695 (Residential Energy Credits, Part II) with your 2025 federal tax return, for the tax year the system was placed in service. You'll need the qualified manufacturer's identification number for the equipment. Confirm your specific situation with a tax professional — eligibility depends on details we can't assess for you.
Do utility rebates reduce what I could have claimed on the federal credit?
For credit-eligible 2025 installs, yes — the IRS treats many utility rebates as purchase-price adjustments you subtract from qualified expenses before computing the credit. It's one more reason to have a tax professional review the exact numbers rather than estimating from a contractor's flyer.
Put This Rebate to Work on Your Project
AC Installation & Replacement in Sarasota
Tankless Water Heater Installation in Sarasota
Explore Financing Options
Manufacturer Rebate: Daikin Instant Rebates: 2026 Offers for Florida Homeowners
Utility Rebate: FPL's $200 A/C Rebate (and Other Utility Programs) Explained
State of Florida: Florida's HEAR & HOMES Rebates: What's Real and What's Not Open Yet
Back to the Rebates Center
Rebates, tax credits, and incentive programs are offered by third parties (government agencies, utilities, and manufacturers), change frequently, and depend on your eligibility, equipment, and location — amounts and availability are not guaranteed. American Plumbing, Heating & Cooling does not provide tax advice; please confirm current federal or state tax treatment with a qualified tax professional. Programs change — call us at (941) 735-6616 to confirm current rebates, and we'll help you identify what you qualify for at your free in-home estimate.