What The 25C Credit Was
The Energy Efficient Home Improvement Credit — section 25C of the tax code — let homeowners claim 30% of the cost of qualifying efficiency upgrades, with an annual cap of $2,000 for heat pumps and heat pump water heaters and $1,200 for other improvements like central AC, insulation, and windows. It was claimed on IRS Form 5695 with your federal return.
When And How It Ended
Federal legislation in 2025 terminated the credit for property placed in service after December 31, 2025. "Placed in service" means installed and operating — not ordered, not quoted, not deposited. A system installed in January 2026 does not qualify even if it was purchased in 2025.
Who Can Still Claim It
Homeowners whose qualifying heat pump, heat pump water heater, or central AC was installed and running by December 31, 2025 claim the credit on their 2025 federal return — the one filed in 2026. Keep the itemized invoice showing equipment model and install date, and note that 2025 claims require the manufacturer's product identification number (PIN) for the equipment on Form 5695.
What This Means For 2026 Quotes In Florida
Any 2026 sales pitch that includes "you'll get the federal tax credit" for a new install is describing a program that no longer exists. Honest quotes in 2026 lean on what is actually available: the FPL $200 instant A/C rebate, manufacturer promotions, and financing terms. If a quote dangles a federal credit, that is a reason to slow down — and to get a second opinion.
What Incentives Actually Remain
In Broward County the verified, currently live offer is FPL's $200 instant A/C rebate for qualifying SEER2 15.2+ system replacements installed through FPL's Participating Independent Contractor program. Manufacturer rebates and seasonal promotions come and go by brand. Efficiency still pays for itself the boring way too: a right-sized, higher-SEER2 system simply costs less every month to run.
Heat Pump Water Heaters Without The Credit
The 25C expiration removed a meaningful discount on heat pump water heaters — but Florida physics still favors them. The unit cuts water-heating electricity use to roughly a third of a standard tank's, and a warm Broward garage keeps it in its most efficient range year-round. The payback period got longer without the credit; it did not disappear.
If You Installed In 2025 And Forgot To Claim
The credit belongs on the return for the year the equipment was placed in service. If you installed in 2025 and your return has already been filed without it, talk to your tax professional about an amended return. Abraham AC can reissue itemized invoices showing equipment models and install dates for tax documentation.
25C Credit: 2025 Installs vs 2026 Installs
The placed-in-service date — not the purchase date — decides everything.
| Question | Installed by Dec 31, 2025 | Installed in 2026 |
|---|---|---|
| Federal 25C credit | Yes — claim on the 2025 return (Form 5695) | No — the credit expired |
| Heat pump / HPWH cap | Up to $2,000 (30% of cost) | Not available |
| Central AC cap | Up to $600 within the $1,200 general cap | Not available |
| Documentation | Itemized invoice + manufacturer PIN | Keep invoices anyway for warranty and resale |
| FPL $200 instant A/C rebate | Separate program — applies if requirements met | Still live for qualifying PIC installs |
If You Installed Qualifying Equipment In 2025
- Confirm the placed-in-service date on your invoice is on or before December 31, 2025.
- Get the manufacturer product identification number (PIN) for the equipment.
- File Form 5695 with your 2025 federal return; keep the itemized invoice.
- Already filed without it? Ask your tax professional about amending.
- Treat any 2026 quote promising a federal credit as a red flag — get a second opinion.
Primary Sources
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Schedule ServiceFAQs
Is there a federal tax credit for heat pumps in 2026?
No. The 25C Energy Efficient Home Improvement Credit expired for property placed in service after December 31, 2025. Equipment installed during 2026 does not qualify for a federal efficiency credit under that program.
Can I still claim the credit for my 2025 installation?
Yes. If the system was installed and operating by December 31, 2025, you claim it on your 2025 federal return using Form 5695 — including the manufacturer's product identification number required for 2025 claims.
What if I paid a deposit in 2025 but installed in 2026?
The credit follows the placed-in-service date, not the contract or deposit date. An install completed in 2026 does not qualify, regardless of when it was ordered or paid for.
How much was the 25C credit worth?
Thirty percent of qualifying costs, capped at $2,000 per year for heat pumps and heat pump water heaters, and $1,200 per year for other improvements — central AC counted up to $600 within that general cap.
A salesperson says there is still a tax credit — are they right?
For a federal 25C credit on a 2026 install, no. Ask them to name the exact program in writing. Utility rebates like FPL's $200 instant A/C rebate do exist, but they are rebates, not tax credits. When a pitch leans on vanished incentives, get a second opinion before signing.
Are there Florida state tax credits for AC or heat pumps?
Florida has no state income tax, so there is no state income-tax credit. Incentives here come as utility rebates (like FPL's) and occasional manufacturer or local programs — always verify the specific program is live before counting it in your budget.
