HEEHRA is the only live federal heat pump rebate left after the One Big Beautiful Bill Act killed 25C in July 2025. The full name — the Home Electrification and Appliance Rebate Act — allocates $4.5 billion to state energy offices, which then pay eligible households up to $8,000 for a qualifying heat pump. The catch is that every dollar is income-tested, and the tiers are less intuitive than they look on a marketing page.
This guide walks through exactly how HEEHRA income tiers work, how HUD's Area Median Income (AMI) tables get applied to your household, and what paperwork a state energy office actually requests. The rules are uniform across states even though the portals are not.
The two tiers that matter
HEEHRA splits eligible households into two rebate brackets. Under 80% of county AMI, the program pays up to 100% of project costs, capped at $8,000 for a heat pump. At 80% to 150% of county AMI, the program pays up to 50% of project costs, capped at the same $8,000 ceiling.
Above 150% AMI, HEEHRA pays zero. There is no phase-out curve above the line — you are either in or out.
The tier boundaries are hard cutoffs. A household at 79.9% AMI with a $10,000 heat pump project gets the full project paid for (subject to the $8k heat pump cap and per-household max). A household at 80.1% AMI with the same project gets exactly $5,000. The marginal dollar of income can cost thousands in rebates, which is why accurate AMI calculation matters before you sign a contractor quote.
How HUD calculates AMI for your household
HUD publishes a new AMI table every year, broken out by county and metropolitan statistical area (MSA). The published figure is the median income for a four-person household in that geography. Your household AMI is that base figure, adjusted for household size.
The adjustment ladder is straightforward. A one-person household uses 70% of the four-person AMI. Two-person uses 80%. Three-person uses 90%. Four-person uses the base figure. Each additional person adds roughly 8% until you hit an eight-person ceiling.
As a concrete example, if your county's four-person AMI is $100,000 and you are a household of two, your AMI reference is $80,000. The 80% HEEHRA tier cutoff for you is $64,000, and the 150% ceiling is $120,000.
Your state energy office pulls the current HUD table the moment you submit your application. The figure is not locked to when you started the project — it is locked to when you applied. If HUD publishes a new table mid-project, a slow-moving application can shift into a different tier.
What states actually verify
Every HEEHRA state portal asks for two things: proof of income and proof of residency at the address where the equipment will be installed.
Proof of income is almost always your most recent filed federal tax return — specifically the AGI line on Form 1040. Some states accept 60 to 90 days of pay stubs in place of a tax return, but only if you can show material income change since you last filed. The most common scenario: you were earning $90,000 last year but got laid off and are now on unemployment. Your state office will often accept pay stubs and an unemployment award letter.
Self-employed applicants get more scrutiny. Schedule C income is volatile, and state offices usually request a two-year average of AGI rather than just the most recent year. Expect to upload both Form 1040s if you file a Schedule C.
Proof of residency is simpler — a utility bill, a driver's license, or a mortgage statement tied to the property address. Rental property applications route through a different track and require the landlord to attest that the building meets HEEHRA tenant income thresholds.
Categorical eligibility — the shortcut path
A handful of states let households skip the AGI paperwork entirely by proving enrollment in another means-tested program. If you already receive SNAP, LIHEAP, Medicaid, SSI, or free/reduced school lunch, your state office may accept that enrollment as proof of under-80% AMI status automatically.
Categorical eligibility is not universal — check your state portal for the specific accepted programs. New York, California, and Colorado all accept at least some categorical documentation. This shortcut dramatically speeds up application processing for households already in the low-income support system.
The tradeoff is that categorical eligibility only routes you to the under-80% tier. If you think your actual AGI would put you in the 80–150% partial-rebate tier, it may be worth doing the AGI paperwork and claiming the reduced rebate anyway.
How HEEHRA stacks with everything else
With 25C dead for heat pumps, HEEHRA no longer stacks with a federal tax credit. It does still stack with state and utility programs — and the stacking is where the real savings land.
Mass Save, ConnectedSolutions, Xcel Energy, PG&E, and roughly 2,000 other utility programs continue to offer $500 to $3,500 in instant rebates on qualifying heat pumps. Those rebates are separate from HEEHRA and do not reduce your HEEHRA amount. A Massachusetts household under 80% AMI can pair a $10,000 Mass Save ConnectedSolutions rebate with the $8,000 HEEHRA rebate — on the same equipment — once the state portal goes live.
HOMES rebates are a separate performance-based federal track, also up to $8,000, also state-administered. You can claim HEEHRA or HOMES on the same project, but not both. See the rebate stacking guide for the full matrix of what combines with what.
A typical stacked project in a live HEEHRA state looks like this: $12,500 heat pump install, $8,000 HEEHRA, $2,000 utility, $0 federal 25C. Net cost to homeowner: $2,500. That math is why the income qualification step is the single most important part of the process.
Common disqualifiers
The most common reason HEEHRA applications get rejected is AGI that crosses the 150% AMI ceiling. Households that feel "middle income" in high-cost-of-living metros (Boston, San Francisco, the New York suburbs) frequently discover their AGI puts them above the HEEHRA line because the county AMI is based on the full MSA rather than the specific town.
The second most common rejection is missing contractor certification. Every HEEHRA state maintains a list of certified contractors who are authorized to file rebates on behalf of clients. A heat pump installed by an uncertified contractor — even a perfectly good one — is ineligible for HEEHRA. Certification is free for contractors but requires them to complete the state's training curriculum.
The third common issue is equipment that doesn't appear on the state's approved AHRI-certified model list. HEEHRA mirrors the technical efficiency bar of the old 25C credit (CEE Tier 2 for the climate zone) but states add additional requirements on top. Always confirm the specific model number is on the state list before signing the quote.
A fourth issue shows up at year-end: households who pre-pay for equipment in December expecting to claim HEEHRA when their state portal goes live the following year. Pre-payment without a submitted, state-approved rebate reservation is at your own risk. Most states require the application to be approved before equipment is installed, and retroactive applications are typically denied outright.
The fifth rejection category is second-home or vacation-property applications. HEEHRA requires the rebated equipment to be installed at your primary residence. Vacation homes, short-term rental properties that are not primarily owner-occupied, and investment properties with absentee landlords are all ineligible under the single-family track. The multifamily track is the only route for investment-property owners, and it has its own stricter rules.
What to do before you apply
Start by pulling your most recent tax return and finding the AGI line. Look up your county's AMI on the HUD user website, then apply the household-size adjustment. Compare your AGI to the 80% and 150% thresholds.
If you are near a tier boundary, talk to your contractor about project timing before you apply. A January application uses the previous year's tax return; an April application might use a more recent one. The difference can be thousands of dollars.
If you straddle the 80% line in either direction, get contractor quotes before you finalize the application. A household at 78% AMI doing an $8,500 project captures 100% under HEEHRA. The same household at 82% AMI doing the same project captures $4,250. The $4,250 difference is large enough that some households delay or accelerate filing timing to land in the more favorable tier, which is legal and routine.
Also verify your state has not suspended new applications. Maine's Efficiency Maine and Vermont's program both hit their reservation ceilings in late 2025 and are currently waitlisting. The federal HEEHRA allocation is $4.5 billion, but each state gets a fixed share — first-come-first-served within that share. Popular programs can run out mid-year.
Once you know your tier, use our heat pump calculator to see which HEEHRA-eligible models qualify in your ZIP, what the full stack is worth, and which certified contractors serve your area. The HEEHRA guide has the full eligibility checklist. For the state-by-state rollout timeline, use the rebate finder to confirm your state's portal is live before you start a project — some states are still in pending status.