HVAC Tax Credits in 2026: What Ended, What's Left, and Texas Rebate Status

Published October 16, 2026 · Reviewed October 16, 2026

Part of our HVAC financing guides.

This is general information, not tax advice. Consult a tax professional about your own return.

Are there federal HVAC tax credits in 2026?

No. According to IRS guidance, the two federal credits that covered home HVAC equipment ended for work completed after December 31, 2025. They were changed by Public Law 119-21, enacted July 4, 2025, and the IRS explained the changes in Fact Sheet 2025-05 on August 21, 2025.

• Energy Efficient Home Improvement Credit (Section 25C) covered qualifying heat pumps, central air conditioners and furnaces. It is not allowed for property placed in service after December 31, 2025.
• Residential Clean Energy Credit (Section 25D) covered items such as geothermal heat pumps. It is not allowed for expenditures made after December 31, 2025, and the IRS treats an expenditure as made when the original installation is completed.

For a heat pump or AC installed in 2026, there is no federal 25C credit to claim.

What if your system was installed in 2025?

If qualifying equipment was installed in 2025, the credit is claimed on your 2025 federal return using IRS Form 5695, Residential Energy Credits. The date that matters is when the work was completed, not when you paid a deposit. Under the IRS FAQs, prepaying in 2025 for an installation finished in 2026 does not count as a 2025 expenditure for the 25D credit.

Keep your installation invoice, the equipment model numbers and any manufacturer certification for qualifying equipment. A tax professional can tell you whether your equipment qualified and how to claim it.

What is the status of the Texas HOMES and HEAR rebates?

As of October 2026, the Texas HOMES and HEAR home energy rebate programs have not launched. The State Energy Conservation Office (SECO), part of the Texas Comptroller, manages the programs and selected APTIM to implement them, but no rebates are available to homeowners yet.

Until SECO announces a launch, there is no Texas HOMES or HEAR rebate to sign up for. Do not sign a rebate agreement with anyone before the programs launch, and check SECO's program page for official news.

What mistakes should you avoid?

The costliest mistake in 2026 is building a buying decision around a credit or rebate that is not available.

• Counting on a 2026 federal credit. Older articles and ads may still describe 25C and 25D as available. They are out of date for work completed after 2025.
• Assuming a deposit locked in a credit. The IRS ties 25D to when installation is completed, not when you paid.
• Signing up for a state rebate that doesn't exist yet. The Texas HOMES and HEAR programs had not launched as of October 2026.
• Missing what is still available. Utility incentives and financing are separate from federal credits and still exist.

What is still available in 2026?

Two things still help with the cost of HVAC work in Greater Houston in 2026: utility incentives and financing.

• CenterPoint Energy incentives. For residential customers in the CenterPoint Energy Houston Electric service area, CenterPoint Energy says HVAC incentives "start at $200 and may increase depending on your installation." They are applied on the installation invoice through a participating contractor, and eligible homes may also qualify for a free ComfortCheck AC tune-up. Details are in our CenterPoint rebate guide.
• Financing. JHC Cooling & Heating offers financing through FTL Finance, available subject to credit approval. FTL Finance sets the rates and terms. See how HVAC financing works with FTL Finance.

Does the end of the credits change which system to buy?

The end of the federal credits removes one input from the decision, but the core questions stay the same: the age and condition of your current system, what a repair would cost compared with a replacement, and what each option costs to run in a climate where cooling dominates. Our guides to repairing or replacing an AC or heat pump and heat pump vs. AC and gas furnace operating costs walk through those choices without assuming any federal credit.

How can you check the current rules yourself?

You can check every point in this guide against primary sources. The IRS publishes its FAQs on the Public Law 119-21 energy credit changes and the instructions for Form 5695. SECO posts the status of the Texas HOMES and HEAR programs on the Comptroller's website. CenterPoint Energy publishes its current residential incentive and ComfortCheck terms on its own site. If an offer you receive does not match those sources, ask for it in writing and check it with a tax professional.

JHC Cooling & Heating, LLC is licensed by the Texas Department of Licensing and Regulation (TACLA75082C), installs and services Goodman equipment, and has served Greater Houston since 2016.

What should you do next?

If you installed qualifying equipment in 2025, talk to a tax professional about Form 5695 before you file. If you are planning work now, check the CenterPoint Energy incentive, then look at financing. You can start an FTL Finance application from the financing page, or request a written estimate first.

Frequently Asked Questions

Can I get the 25C tax credit for a heat pump installed in 2026?

No, according to IRS guidance. The Energy Efficient Home Improvement Credit (25C) is not allowed for property placed in service after December 31, 2025. Consult a tax professional about your situation.

I paid a deposit in 2025 but the install finished in 2026. Does it count?

For the Residential Clean Energy Credit (25D), the IRS treats an expenditure as made when the original installation is completed, so an installation finished in 2026 does not count as a 2025 expenditure. For 25C, the test is when the property was placed in service. Ask a tax professional how this applies to you.

How do I claim a credit for a system installed in 2025?

Qualifying 2025 installations are claimed on your 2025 federal return using IRS Form 5695, Residential Energy Credits. Keep the invoice and model numbers. A tax professional can confirm whether your equipment qualified.

When will the Texas HOMES and HEAR rebates start?

They had not launched as of October 2026, and no official launch date for homeowners has been announced. SECO, part of the Texas Comptroller, runs the programs and posts updates on its website. Don't sign a rebate agreement before the programs launch.

Are there any HVAC incentives available in Houston right now?

Yes. CenterPoint Energy offers residential HVAC incentives that start at $200 and may increase depending on the installation, applied through a participating contractor, plus a free ComfortCheck tune-up for eligible homes. Confirm current terms on CenterPoint Energy's site.

Is this tax advice?

No. This guide summarizes public IRS and state information as of October 2026. Your eligibility depends on your own tax situation, so consult a tax professional.

Sources

1. IRS Fact Sheet 2025-05 — FAQs on modification of sections 25C, 25D and others under Public Law 119-21 — 25C ends for property placed in service after December 31, 2025; 25D ends for expenditures after December 31, 2025, treated as made when installation is completed (as of October 16, 2026)
2. IRS — About Form 5695, Residential Energy Credits — form used to claim the credits (as of October 16, 2026)
3. Texas Comptroller, State Energy Conservation Office — IRA home energy rebates — Texas HOMES and HEAR program status (as of October 16, 2026)
4. APTIM — Texas home energy rebates contract — SECO selected APTIM to implement the programs (as of October 16, 2026)
5. Sierra Club Lone Star Chapter — Texas HOMES and HEAR next steps (June 2026) — programs not yet available to homeowners (as of October 16, 2026)
6. CenterPoint Energy — Heating and Cooling incentives — incentives "start at $200", applied through a participating contractor; ComfortCheck tune-up (as of October 16, 2026)