What's eligible for the Colorado state heat pump tax credit in 2026?

A variety of heat pump systems are eligible, including air-source, ground-source, water-source, combined-source, VRF systems, heat pump water heaters, and thermal energy networks. Systems must provide at least 80% of annual heating needs.

How much is the Colorado state heat pump tax credit?

The total tax credit for the State of Colorado Heat Pump Contractor is $1,000 for 2026. 66.6% can be retained by the contractor, with the remainder offered to customers as a discount upfront (minimum discount).

Who is in charge of the Colorado heat pump tax credit?

The Colorado Energy Office in conjunction with the Department of Revenue administers the program. Contractors submit applications and receive tax credits when filing taxes.

Do I need to file paperwork for this credit?

No. Customers receive the discount directly at installation and don't need to file any paperwork. The registered contractor handles all documentation and submission to the state.

Can I get both the Colorado and federal heat pump tax credit?

The federal 25C credit ended December 2025, but the Colorado state credit ($1,000) remains active. Like the other rebates, the contractor claims this credit from the state and applies it as a discount on your invoice. You don't file anything. The state credit is completely independent of utility rebates and HEAR, so there's no conflict or overlap. It stacks on top of whatever Xcel, HEAR, or local programs you qualify for.

Does the Colorado heat pump tax credit cover mini-splits?

Yes. Ductless mini-split heat pumps qualify for the Colorado state tax credit as long as the system provides at least 80% of the home's annual heating needs and is installed by a registered contractor. Both single-zone and multi-zone mini-split systems are eligible.

What happened to the federal heat pump tax credit?

The federal 25C residential energy efficiency tax credit ended on December 31, 2025. It previously provided up to $2,000 for heat pump installations. The Colorado state credit ($1,000) is a completely separate program and remains active for 2026. You can still stack the state credit with Xcel Energy rebates and HEAR (if income-qualified).

How much has the Colorado heat pump credit changed since 2024?

The credit started at $1,500 per system when it launched in January 2024, dropped to $1,250 for 2025, and is $1,000 for 2026 and beyond. This planned phase-down was built into the original legislation. The program itself remains fully funded and active.

Available Now

Colorado Heat Pump Tax Credit

Q: How do I claim the Colorado heat pump tax credit?

You don't claim it yourself. The contractor (UniColorado) claims the credit from the state and gives you a discount at installation. The contractor submits the paperwork to the Colorado Department of Revenue and receives reimbursement when filing taxes.

Beginning January 1, 2024, residents of Colorado became eligible for tax credits to install heat pumps for both space and water heating. In 2026 and after, the credit has been reduced to $1,000 for heat pumps. UniColorado is a registered contractor.

Updated February 18, 2026•By Editorial Staff

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AI Summary

Contractor claims it from the state and passes the discount to you; you don't file anything. Minimum discount varies by system type; UniColorado offers the full minimum. Stacks with Xcel and HEAR. No income cap.

Status

Available Now

Income Requirement

None

Who Qualifies

All Colorado Residents

Credit Amount

$1,000

Minimum Discounts by System Type

The contractor provides at least these amounts as upfront discounts. Many contractors offer more.

System Type: Air-source heat pump
Minimum Discount: $333

System Type: Ground, water, or combined-source heat pump
Minimum Discount: $667

System Type: Heat pump water heater
Minimum Discount: $83

System Type	Minimum Discount
Air-source heat pump	$333
Ground, water, or combined-source heat pump	$667
Heat pump water heater	$83

How does the Colorado heat pump tax credit work?

Colorado's heat pump tax credit gives all residents an upfront discount when they install a qualifying heat pump through a registered contractor. For 2026, the total credit is $1,000 per heat pump system. There is no income requirement.

The credit launched January 1, 2024 at $1,500 per system, dropped to $1,250 in 2025, and settled at $1,000 for 2026 and beyond. The reduction reflects the program's planned phase-down, not a loss of funding. The program remains fully active.

This is a state-level incentive administered by the Colorado Energy Office and Department of Revenue. It is separate from the federal 25C tax credit, which ended December 2025. The Colorado credit continues regardless of federal policy changes.

The contractor receives the full credit from the state and passes a portion to you as an upfront discount on your invoice. The minimum discount varies by system type (see table below). Many contractors, including UniColorado, offer more than the required minimum. This credit stacks with Xcel Energy rebates and HEAR rebates for even greater savings.

What heat pumps qualify for the Colorado tax credit?

You qualify if

Air-source heat pump

Ground-source heat pump

Water-source heat pump

Combined-source heat pump

Heat pump water heater

VRF heat pump system

Not eligible if

Systems covering less than 80% of heating needs

DIY installations (must use registered contractor)

How do I claim the Colorado heat pump tax credit?

Work With Registered Contractor

UniColorado is a registered contractor

Receive Discount at Install

Credit applied directly to your invoice

Contractor Handles Paperwork

We submit to Department of Revenue

State Reimburses Contractor

You're done - no further action needed

You don't file any paperwork. The contractor manages the entire process from quote to state reimbursement. You receive the discount directly at installation.

Go Beyond the Minimum With UniColorado

At UniColorado Heating & Cooling, we don't believe in doing the least. Enjoy discounts of $1,000 using the Colorado State Heat Pump Tax Credit on all eligible systems when you purchase a heat pump system from Colorado's most experienced heat pump contractor.

We handle the full process: system design, permitting, installation, and all tax credit paperwork with the Colorado Department of Revenue. Your discount is applied directly to your invoice at installation. See our full rebate guide for all available incentives.