If you’ve been thinking about replacing your old heating or cooling system, 2025 is your last chance to claim federal tax credits under the Section 25C Energy Efficient Home Improvement Credit.
After December 31, 2025, these credits are scheduled to expire for new projects. Waiting too long could mean paying more out-of-pocket for the same high-efficiency equipment.
💡 What Is the Section 25C Tax Credit?
Section 25C offers a powerful way to offset the cost of energy-saving upgrades in your primary home.
Depending on what you install, you can currently claim up to $3,200 per year, including:
✅ Heat Pumps – 30% of the cost, up to $2,000
✅ Central Air Conditioners and Furnaces – up to $600
✅ Insulation, Windows, and Doors – up to $1,200 combined
This credit applies to equipment installed and placed in service by December 31, 2025.
🌿 What Makes a System Eligible?
Not every new system qualifies—only those that meet strict federal energy-efficiency standards.
Here’s what matters:
⭐ ENERGY STAR® Certification
- Qualifying systems must be ENERGY STAR certified, and they must meet the ENERGY STAR Most Efficient level (especially for heat pumps and central air systems).
✅ High Efficiency
- Furnaces, air conditioners, and heat pumps must exceed baseline efficiency requirements set by the federal government.
These are typically premium systems designed to use less energy and deliver greater comfort. While they cost more up front, combining tax credits with lower energy bills makes them an excellent investment over time.
🛑 What’s Changing After 2025?
According to multiple industry sources, including ACHR News and Wipfli Tax Advisors, Section 25C is set to end for any projects completed after December 31, 2025.
This means:
- You must finish installation and have your new system operating by the end of 2025.
- Any work completed after that date will no longer be eligible for this credit.
💵 Why Act Now?
These incentives can make a significant dent in the cost of replacing your system:
🔥 Replacing an older furnace or AC with a high-efficiency model can save you hundreds to thousands of dollars in credits.
🌿 Upgrading to a qualifying heat pump can deliver up to a $2,000 tax credit, plus annual energy savings.
🕒 When Should You Start?
The sooner, the better.
Many homeowners will rush to schedule installations in 2025. Combined with manufacturing lead times and permitting delays, this could create a backlog.
To secure your credit, we recommend:
✅ Getting your estimate now
✅ Reserving equipment early
✅ Scheduling installation well before the end-of-year deadline
🏡 Next Steps
If you’re considering a new heat pump, furnace, or central air system, now is the time to start planning.
Our team is here to help you:
- Identify qualifying ENERGY STAR-certified equipment
- Estimate your tax credit savings
- Schedule a project timeline that guarantees eligibility
✨ Let’s Get Started
Don’t leave money on the table. Contact us today to schedule a free consultation and lock in your tax credits before they expire.
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