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June 8, 2026·7 min read

Heat Pump Rebates 2026: Federal + State Money on the Table

The IRA Section 25C covers 30% up to $2,000/yr. The IRA Section 50121 HEEHRA program adds up to $8,000 for income-qualified households. Here's how to stack both.

Photo by Erik Mclean / Unsplash

Heat pump buyers in 2026 can stack two federal programs: the Section 25C tax credit and the IRA HEEHRA rebate (when available). Together, they can reduce a $7,000 heat pump to under $3,000 for income-qualified households.

Federal IRA credit: Section 25C

All homeowners installing a qualifying heat pump can claim 30% of cost up to $2,000 per year (resets annually). File IRS Form 5695 with your tax return.

Qualifying equipment: ENERGY STAR certified heat pumps rated at or above the Consortium for Energy Efficiency (CEE) Tier specifications. Most major brands (Carrier, Lennox, Daikin, Mitsubishi) have qualifying models.

Non-refundable: Must have federal tax liability. Unused credit does not refund — it cannot carry forward for Section 25C (unlike the solar ITC).

HEEHRA: High-Efficiency Electric Home Rebate Act

HEEHRA provides point-of-sale rebates through state programs. Households earning 80–150% of area median income (AMI) receive 50% of cost up to $8,000. Households below 80% AMI receive 100% of cost up to $8,000.

Availability: States must apply to DOE and establish programs. As of 2026, approximately 30 states have active HEEHRA programs. Check your state energy office for availability.

Cannot stack with Section 25C: If you receive a HEEHRA rebate, the Section 25C credit applies only to the portion you paid out of pocket.

Stacking example

$8,000 heat pump for a household at 80% AMI in a HEEHRA-active state:

• HEEHRA rebate (100% of cost, max $8,000): -$8,000
• Section 25C credit on remaining cost ($0): $0
• Net cost: $0

For a household above 150% AMI:

• HEEHRA rebate: $0
• Section 25C credit: -$2,000
• Net cost: $6,000

Use the Heat Pump Cost Calculator to estimate your total cost, credits, and savings.