No. There is no federal tax credit for HVAC equipment placed in service in 2026. The Energy Efficient Home Improvement Credit (§25C) and the Residential Clean Energy Credit (§25D) were both terminated for property placed in service after December 31, 2025, under Public Law 119-21, enacted July 4, 2025. No replacement federal credit exists. What remains are utility rebates — and in Columbia those are substantial.
What exactly ended?
Two separate credits, both of which homeowners had used for years on heating and cooling projects.
| Credit | What it covered | Status for 2026 |
|---|---|---|
| §25C Energy Efficient Home Improvement Credit | Qualifying heat pumps, air conditioners, furnaces, water heaters and envelope improvements | Ended. IRS describes it as covering improvements made through December 31, 2025 |
| §25D Residential Clean Energy Credit | Geothermal heat pumps, solar, and other qualifying clean-energy property | Ended. IRS states it is not available for any property placed in service after December 31, 2025 |
Does that kill the 30% geothermal credit too?
Yes. Geothermal heat pumps were claimed under §25D, so the end of that credit is the end of the 30% geothermal incentive for anything placed in service in 2026. This is the single most out-of-date claim still circulating in HVAC advertising, because it was the largest number on the page for years.
It does not make geothermal a bad project — it changes the arithmetic. Locally, geothermal is still rebated: $1,200 from Columbia Water & Light for a system under 5 tons, and $750 per ton from Boone Electric Cooperative for members in co-op territory. Those are real, current, and they come from your own utility.
Where do these facts come from?
Three sources, all of which you can check yourself rather than taking a contractor's word for it. The IRS publishes a page for the Energy Efficient Home Improvement Credit and a separate page for the Residential Clean Energy Credit; both now describe the December 31, 2025 cutoff. ENERGY STAR maintains a federal tax credits page that tracks the same change. The underlying law is Public Law 119-21, enacted July 4, 2025.
We are a heating and cooling company, not tax advisers. Anything touching your actual return — a 2025 installation, carryforwards, eligibility questions — belongs with your accountant.
⚠️ If a 2026 quote shows a federal credit, ask about it
Plenty of contractor sites, brochures and manufacturer flyers still advertise "$2,000 back on a heat pump" or "30% off geothermal." Those pages were written while the credits existed and were never updated. A quote whose bottom line depends on a credit that no longer exists is not a real number — and if you are comparing two bids, that difference can be larger than the difference in the equipment.
Why are so many HVAC sites still advertising credits?
Mostly inertia. The credits ran for years, the marketing copy was written once, and a rebate page is not something most companies revisit. Some of it is less innocent — a large advertised federal credit makes a quote look smaller than it is. Either way, the effect on a homeowner is the same: you budget for money that is not coming.
The right response is simple. Ask which code section the credit is claimed under, and check the IRS page for it. If a company cannot answer that question about a number on its own estimate, that tells you something about the rest of the estimate.
What can you still claim in Columbia and Boone County?
Utility rebates, and they are not small. Which program applies depends entirely on the utility name printed on your electric bill.
| Program | Equipment | Amount |
|---|---|---|
| Columbia Water & Light City of Columbia Utilities electric customers | A/C or heat pump, SEER2 15.2–18.1 | $800 |
| A/C or heat pump, SEER2 18.2+ | $1,200 | |
| Geothermal under 5 tons | $1,200 | |
| Efficient Electrification — existing home switching to a heat pump | $1,200 | |
| Boone Electric Cooperative Co-op members | Geothermal, per ton (10-ton residential cap) | $750/ton |
| Dual-fuel system, HSPF2 7.5 minimum | $300 |
Full detail on each: the Columbia Water & Light rebate guide and the Boone Electric rebate page. The city program also rebates a smart thermostat up to $50, a heat pump water heater at $500, attic insulation up to $500, duct insulation up to $300 and air-leakage reduction up to $100 — measures that quietly reduce the size of system a house needs in the first place.
How should this change what you buy?
With the federal layer gone, the efficiency tiers that matter are the ones your utility pays for. Inside the city that means the SEER2 15.2 minimum and the jump to $1,200 at SEER2 18.2 — thresholds worth checking against the AHRI listing before you pick equipment for an A/C installation or a heat pump installation. Outside the city, the per-ton geothermal structure and the dual-fuel rebate reward a different set of choices.
The other thing that has not changed is the value of a right-sized, properly installed system. Columbia sees roughly 5,024 heating degree days and 1,248 cooling degree days a year; an oversized unit short-cycles through both seasons, and the city can deny a rebate on equipment it considers oversized. Whether the house is in Historic Old Southwest, Vanderveen Crossing or out in Ashland, a load calculation is worth more than a credit that no longer exists. And if replacement isn't the answer yet, a sound furnace repair still beats a rushed purchase — our guide to repairing versus replacing walks through the call.
Frequently asked questions about 2026 HVAC tax credits
Is there a federal tax credit for a new furnace or heat pump in 2026?
No. Both residential energy credits ended for property placed in service after December 31, 2025. The Energy Efficient Home Improvement Credit under section 25C and the Residential Clean Energy Credit under section 25D were terminated by Public Law 119-21, enacted July 4, 2025. No replacement federal credit has taken their place for HVAC equipment.
Did the 30% geothermal tax credit end too?
Yes. Geothermal heat pumps were claimed under section 25D, the Residential Clean Energy Credit, and that credit is not available for any property placed in service after December 31, 2025. Geothermal is still rebated locally, at $1,200 from Columbia Water and Light for a system under 5 tons and at $750 per ton from Boone Electric Cooperative.
A contractor quoted me a federal credit on a 2026 install. Who is right?
Check the IRS pages for the Energy Efficient Home Improvement Credit and the Residential Clean Energy Credit, and the ENERGY STAR federal tax credit page. Many contractor websites and brochures were written while the credits existed and have not been updated. If a quote's value depends on a federal credit for a 2026 installation, ask which code section it is claimed under and verify it before you sign.
What can a Columbia homeowner still claim instead?
Utility rebates. If the City of Columbia bills you for electricity, Columbia Water and Light pays $800 or $1,200 on a qualifying replacement air conditioner or heat pump depending on SEER2 rating, $1,200 on geothermal under 5 tons, and $1,200 for switching a gas or propane home to a heat pump. If Boone Electric Cooperative serves you, geothermal pays $750 per ton and dual fuel pays $300 per system.
What does placed in service mean?
The statutory cutoff is written around when the property is placed in service rather than when it was ordered or paid for. If your equipment was installed and put into use in 2025, ask a tax professional how the rules apply to your return. We are a heating and cooling company, not tax advisers, and questions about your own filing belong with your accountant.
Should I have rushed to install before the deadline?
That decision has passed, and it is not worth regretting. The local rebates are substantial and they are still available: a Columbia Water and Light heat pump project can claim up to $1,200, and envelope measures such as attic insulation, duct insulation and air sealing carry their own rebates on top. The right time to replace a system is when it is failing or when the operating cost justifies it.