The $2,000 federal heat pump credit
is gone.
25C expired December 31, 2025. Here's exactly what replaced it, what survived OBBBA, and what federal credits still apply in 2026.
What happened to the federal heat pump tax credit?
The 25C credit that paid up to $2,000/year for heat pumps was repealed by the One Big Beautiful Bill Act in July 2025 and expired December 31, 2025. As of 2026, there is no federal tax credit for air-source heat pumps. State and utility rebates are now the only rebate path. Geothermal 25D (30%) remains active through 2032.
What OBBBA killed
The One Big Beautiful Bill Act (OBBBA), signed July 2025, retroactively sunset the Inflation Reduction Act's residential clean-energy credits. Three major 2025 credits expired on December 31, 2025 and do not apply to 2026 installations:
- 25C Energy Efficient Home Improvement Credit — $2,000/yr cap for heat pumps, heat pump water heaters, biomass stoves. Gone.
- 25D Residential Clean Energy Credit (owned solar + battery) — 30% of owned system cost. Gone for owned systems.
- 179D commercial building deduction enhancements — reverted to pre-IRA limits.
What survived
Not everything. A few federal incentives remain intact in 2026:
- 25D geothermal heat pumps (30% credit through 2032) — carved out of OBBBA. The only residential clean-energy credit still paying in 2026.
- 48E commercial ITC (third-party-owned solar/battery) — through 2032-2033. This is why the industry has pivoted hard to TPO leases and PPAs.
- HEEHRA (IRA rebates, not credits) — already appropriated, now administered state-by-state. Up to $14,000/household. See the state map.
Why state + utility rebates matter more now
Before OBBBA, the federal 25C credit was the headline. State and utility incentives were a bonus. The math has inverted.
In Massachusetts in 2026, an income-qualified household stacking HEEHRA ($8,000) + Mass Save rebates (up to $10,000) + MOR-EV/utility-specific bonuses walks out with a larger total incentive than 25C ever delivered — even before accounting for the fact that 25C was a tax credit (needed tax liability) while HEEHRA is a direct rebate.
The catch: HEEHRA has launched in only a handful of states. The rest are stuck in DOE approval queues. The state-by-state status map tells you exactly where your rebate stack is real versus theoretical.
Find what actually applies
Enter your ZIP to see the stacked rebates that replaced 25C in your state.
Where 25C went, what to do now
OBBBA timeline, remaining federal items, and how to sequence stacking without the dead tax credit.
Your state rebate stack is live.
Find every program that applies — federal, state, utility — in one lookup.