In 2025, HVAC tax credits and rebates help homeowners save on energy-efficient upgrades, offering up to $3,200 annually for heat pumps, air conditioners, and furnaces. Eligible systems must meet ENERGY STAR standards, with tax credits covering 30% of installation costs.
With programs like the Energy Efficient Home Improvement Credit and local utility rebates, you can maximize your HVAC investment while reducing your carbon footprint.
If you’re looking for expert HVAC solutions that qualify for these incentives, Genz HVAC offers high-efficiency systems designed to meet energy-saving requirements.
What Are HVAC Tax Credits and Rebates?
HVAC Tax Credits
- Tax credits directly reduce the amount of income tax owed to the IRS.
- The Energy Efficient Home Improvement Credit allows homeowners to claim 30% of HVAC installation costs, up to $3,200 annually.
- Credits apply to heat pumps, air conditioners, furnaces, and other qualified upgrades.
HVAC Rebates
- Rebates provide cash incentives from manufacturers, utility companies, or state programs for purchasing energy-efficient equipment.
- Unlike tax credits, rebates offer savings upfront instead of at tax time.
- Some states and utility providers offer up to $2,000 in rebates for heat pumps and other high-efficiency systems.
Federal HVAC Tax Credit Breakdown for 2025
The Inflation Reduction Act extends HVAC tax credits through 2032, allowing homeowners to claim incentives for energy-efficient improvements.
Qualifying HVAC Upgrades and Tax Credit Limits
- Heat Pumps: Up to $2,000 (must meet ENERGY STAR standards).
- Central Air Conditioners: Up to $600 (SEER2 16, EER2 12 minimum).
- Gas Furnaces: Up to $600 (97% AFUE or higher).
- Geothermal Heat Pumps: 30% of the cost, no cap.
- Water Heaters: Up to $600, depending on type.
Eligibility Requirements
- The property must be your primary residence (rentals do not qualify).
- Equipment must meet the highest efficiency ratings set by the ENERGY STAR program.
- Starting in 2025, qualifying HVAC products must include a product identification number (PIN) on tax returns.
State and Local HVAC Rebates for 2025
Utility Company Rebates
- Many electric and gas providers offer rebates for heat pumps, furnaces, and smart thermostats.
- Some companies offer up to $1,500 for ENERGY STAR-certified heat pumps.
High-Efficiency Electric Home Rebate Program
- Available for low- and middle-income households.
- Provides up to $8,000 for heat pumps and $4,000 for electrical upgrades.
Regional Energy Efficiency Programs
- States like California, New York, and Florida offer additional rebates for high-efficiency HVAC systems.
- Some state programs provide instant discounts at the time of purchase.
How to Claim HVAC Tax Credits and Rebates in 2025
Choose a Qualified HVAC System
- Select an ENERGY STAR-certified heat pump, air conditioner, or furnace.
- Ensure it meets the federal efficiency standards for 2025.
Save All Documentation
- Keep receipts, invoices, and manufacturer certification statements.
- If claiming a federal tax credit, retain your product identification number (PIN).
File Your Tax Return
- Use IRS Form 5695 to claim the Energy Efficient Home Improvement Credit.
- Submit it with your annual tax return to receive your credit.
Apply for Rebates
- Check with local utility providers for available rebate programs.
- Some rebates require pre-approval before installation.
Maximizing Your HVAC Savings in 2025
- Combine tax credits and rebates for maximum savings.
- Upgrade multiple HVAC components at once to qualify for multiple credits.
- Work with a certified HVAC contractor to ensure eligibility for federal and state programs.
Final Thoughts
In 2025, homeowners can save thousands by taking advantage of HVAC tax credits and rebates. Investing in energy-efficient heating and cooling systems not only lowers energy bills but also provides long-term savings through federal incentives.
For expert guidance on choosing the best tax-credit-eligible HVAC systems, contact Genz HVAC for professional installation and energy-efficient solutions.
