How do I claim the HVAC tax credit?

File IRS Form 5695 with your annual tax return. You'll need the manufacturer's certification statement (we provide this) and your installation receipt. The credit reduces your tax liability dollar-for-dollar.

Can I claim the credit if I got a rebate too?

Yes, but you must subtract the rebate from the cost basis before calculating the 30% credit. For example, if you paid $10,000 and received a $2,000 rebate, you'd calculate 30% of $8,000 = $2,400 credit (subject to the annual cap).

I don't owe much in taxes — can I still benefit?

The 25C credit is non-refundable, meaning it can only reduce your tax liability to zero — it won't generate a refund. However, IRA rebate programs provide direct rebates regardless of tax liability, which may be more beneficial.

HVAC Tax Credits 2026 — Federal 25C & IRA Rebates

Complete guide to 2026 HVAC tax credits and rebates — how much you can save on a new heating or cooling system.

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Professional HVAC Tax Credits 2026 — Federal 25C & IRA Rebates in Asheville & Western NC

Federal HVAC Tax Credits: The 2026 Landscape

The Inflation Reduction Act (IRA) created generous, long-lasting tax incentives for energy-efficient home improvements, including HVAC equipment. These credits aren't one-year specials — they're available through 2032 and can be claimed each year you make qualifying improvements. For WNC homeowners planning an HVAC upgrade, these incentives significantly reduce the net cost of high-efficiency equipment.

The 25C Tax Credit (Energy Efficient Home Improvement Credit)

This credit covers 30% of the cost of qualifying equipment, up to annual caps: Heat pumps (central or mini split): Up to $2,000 per year. Central air conditioners: Up to $600 per year. Gas furnaces (96%+ AFUE): Up to $600 per year. Boilers: Up to $600 per year. The $2,000 heat pump cap is separate from the $600 caps for other equipment, meaning you can claim up to $2,600 total in one year if you install both a heat pump and a furnace. This is a tax credit, not a deduction — it directly reduces the tax you owe dollar-for-dollar.

IRA Rebate Programs

In addition to tax credits, the IRA funds state-administered rebate programs: HOMES (Home Owner Managing Energy Savings): Up to $8,000 for whole-home efficiency improvements based on measured energy savings. HEEHR (High-Efficiency Electric Home Rebate): Point-of-sale rebates for heat pumps, heat pump water heaters, electrical panels, and other electrification measures. Income-qualified households can receive larger rebates. North Carolina is rolling out these programs through the state energy office — check current availability when planning your project.

Qualifying Equipment for 2026

To qualify for the 25C credit, HVAC equipment must meet efficiency requirements: Central AC: SEER2 ≥ 16 (split) or ≥ 15.2 (packaged). Heat pump: SEER2 ≥ 16, HSPF2 ≥ 8.1, EER2 ≥ 12. Gas furnace: AFUE ≥ 97%. These thresholds represent high-efficiency equipment — not the minimum legal standard. Quality Comfort helps you select qualifying equipment and provides the manufacturer certification statements needed to claim the credit on your tax return.