Federal Heat Pump Tax Credit (25C) - Ended
The federal 25C tax credit for heat pumps ended December 31, 2025. The $2,000 annual heat pump credit was eliminated by the One Big Beautiful Bill Act. If you installed a heat pump before 2026, you can still claim the credit on your 2025 tax return.
Updated February 27, 2026•By Editorial Staff
The 25C Federal Tax Credit Has Ended
The federal 25C tax credit for heat pumps ended December 31, 2025. The $2,000 annual heat pump credit was eliminated by the One Big Beautiful Bill Act signed into law in 2025. If you installed a heat pump before 2026, you can still claim the credit on your 2025 tax return (or the year of installation).
This was a tax credit, not a rebate. You claimed it when filing your federal return. It reduced your tax liability dollar-for-dollar. The credit was originally part of the Inflation Reduction Act (2022) and was scheduled to run through 2032. Congress ended it early through the One Big Beautiful Bill Act.
If You Installed in 2025 or Earlier
Gather Documentation
Manufacturer certification, contractor invoice, proof of payment
Download Form 5695
Residential Energy Credits form from IRS.gov
Complete Part II
Enter qualifying expenditures and calculate credit
File With Tax Return
Include Form 5695 with your 2025 federal return
You can still claim the 25C credit for qualifying installations completed before January 1, 2026. The credit applies to the tax year the installation was completed, not when you paid.
You qualify if
Installation completed before January 1, 2026
Equipment met ENERGY STAR or CEE requirements at time of install
Property is your primary residence
Have manufacturer certification and contractor invoice
Not eligible if
Installation in 2026 or later
Rental or second home installations
DIY installations without proper documentation
Resources for 2025 Claims
Need Documentation for a 2025 Claim?
If UniColorado installed your heat pump in 2025 or earlier, we can provide the manufacturer certification (QMID code) and itemized invoice you need for Form 5695. Contact us if you need copies of your installation documentation.
For new installations in 2026, the federal credit is gone, but Colorado programs now provide more in total incentives. See our complete rebate guide for current programs.
See What's Available in 2026
Colorado still has $15,000+ in rebates. We apply every program you qualify for as an upfront discount.
What About the IRA Rebates (HEAR)?
The Inflation Reduction Act funded two programs. They're different from the 25C tax credit and did not end in 2025. They actually mostly got started in 2025 for Colorado.
HEAR (Home Electrification and Appliance Rebates) is still available. It's funded through a separate pool of IRA dollars allocated to Colorado and is not affected by the One Big Beautiful Bill Act. HEAR provides up to $8,000 for heat pumps (up to $14,000 for lower-income households). Unlike the 25C credit, HEAR is applied at the time of purchase, not on your tax return.
Active Rebate Programs in 2026
Up to $2,250/ton for cold-climate heat pumps. Available to Xcel gas customers.
Up to $8,000 for heat pumps. Income-qualified (under 150% AMI).
$1,000 upfront discount for all Colorado residents. No paperwork required.
Complete overview of every active program and how to stack them.
What Rebates Are Still Available?
The federal credit is gone, but Colorado still has significant heat pump rebates in 2026.
| Program | Rebate | Details |
|---|---|---|
| Xcel Energy | $2,250/heating ton | |
| HEAR | Up to $14,000 | |
| Colorado State Tax Credit | $1,000 | |
| Power Ahead / DRCOG | TBD | |
| United Power | Varies | |
| EnergySmart | Varies | |
| Xcel IQ | 25-100% of cost | |
| Xcel Mountain Energy | $7,500/heating ton |
Available Rebate Programs
Explore these programs that are still active in 2026.
Stack Your Savings
Here's what stacking looks like for a typical 3-ton cold climate heat pump installation.
Income-qualified, Xcel customer (2026)
Based on a 3-ton cold climate heat pump. Actual savings vary by system size and eligibility.
Frequently Asked Questions
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