The Federal HVAC Tax Credit Ended. What SoCal Homeowners Can Still Use in 2026

The short version

The federal Energy Efficient Home Improvement Credit, often called 25C, paid back part of the cost of qualifying heat pumps, central ACs and furnaces. The IRS now states that the credit is allowed for qualifying property placed in service on or after January 1, 2023, and before December 31, 2025. A system installed in 2026 falls outside that window.

That matters because a lot of HVAC marketing written in 2024 and 2025 is still online. Quotes, ads and even manufacturer pages may still mention "up to $2,000 back" for a heat pump. For 2026 installs, that money isn't there.

If your system went in during 2025

If your equipment was placed in service before the end of 2025, the credit can still be claimed on your 2025 return. Keep the invoice, the AHRI certificate showing the matched system's ratings, and any manufacturer certification statement. A tax professional can confirm whether your specific system qualified.

What's left for 2026 in Southern California

State programs have tightened too. TECH Clean California's single-family HVAC and heat pump water heater incentives were reserved statewide as of November 14, 2025. The state's HEEHRA income-qualified rebates were fully reserved for single-family homes statewide as of February 24, 2026, with later requests going to a waitlist; a waitlisted project only qualifies if the heat pump is installed after the reservation is approved.

That doesn't mean there is nothing. Utility programs change through the year, and local or income-qualified offers come and go. Check before you sign, not after.

• SDG&E customers (most of San Diego County): check sdge.com/rebates.
• Southern California Edison and SoCalGas customers (much of Riverside, Orange and Los Angeles counties): check each utility's rebate pages.
• Use The Switch Is On to search incentives by address.

How to price a 2026 replacement without the credit

Without a tax credit, the efficiency upgrade has to pay for itself through lower bills and comfort. In mild coastal Climate Zone 7, a mid-efficiency heat pump sized correctly often makes more sense than a top-tier unit. Inland, in Climate Zone 10, higher efficiency earns back more because the system runs more hours.

Ask every bidder for the same three things: a load calculation, the AHRI certificate number for the proposed system, and an itemized price that shows permit and HERS testing fees.