HVAC Tax Credits and Rebates in 2026: What Maryland Homeowners Can Claim

The federal 25C and 25D tax credits ended for equipment placed in service after December 31, 2025. Maryland homeowners still have a strong 2026 hand: claim qualifying 2025 installs on the 2025 return (Form 5695, due April 15), use the EmPOWER Maryland rebates that run through your electric utility, and check the state's Home Energy Rebates for income-qualified households. Start with one question: who is your utility?

On this page:

• What Changed: The Federal Credits Ended

• Installed in 2025? Claim It Now

• EmPOWER Maryland, by Utility

• Maryland's Home Energy Rebates

• The Stacking Question

• FAQs

Maryland has been paying homeowners to upgrade equipment for so long that the program's name is just part of the utility bill: EmPOWER.

That machine didn't stop when the federal credits did. For 2026, it's the center of the state's story, with the newer federal rebate money layering on top for households that qualify.

What Changed: The Federal Credits Ended

Federal legislation passed in July 2025 terminated the Energy Efficient Home Improvement Credit (25C) and the Residential Clean Energy Credit (25D) for property placed in service after December 31, 2025. The installation date decides it, not the contract date, so a 2026 install earns no federal credit regardless of when it was ordered.

Untouched by the change: EmPOWER Maryland, the Maryland Energy Administration's programs, and the federally funded Home Energy Rebates that flow through the state. In Maryland, that's a deeper bench than most states can claim.

Installed in 2025? Claim It Now

Equipment installed and operational by December 31, 2025 keeps its credit; you collect it on the 2025 return filed by April 15, 2026 with IRS Form 5695.

Round up three documents: the invoice showing the in-service date, the AHRI certificate, and the manufacturer's certification statement. Your installer generates all three, and Horizon customers can request the set with one call. Educational information, not tax advice; your tax professional signs off on the return.

EmPOWER Maryland, by Utility

EmPOWER Maryland is the state's standing efficiency framework, funded and delivered through the electric utilities, which means the rebate catalog you can use is determined by the name on your bill.

BGE customers (the Baltimore metro core of Horizon's Maryland footprint, from Bel Air to Columbia to Glen Burnie) have a mature residential rebate catalog through BGE Smart Energy Savers that typically covers high-efficiency heat pumps, smart thermostats, and home performance work.

Delmarva Power customers (the Eastern Shore, Salisbury, and Ocean City corridor) have their own EmPOWER HVAC efficiency offerings, structured similarly with different amounts.

Potomac Edison, Pepco, and SMECO customers outside our core footprint each run equivalents; the EmPOWER banner covers them all.

That electrification push deserves its own sentence: Maryland policy currently favors heat pumps hard, which means homeowners weighing a furnace-vs-heat-pump replacement will usually find the rebate math leaning toward the heat pump. It's worth pricing both ways before deciding.

Maryland's Home Energy Rebates

The IRA's two surviving rebate programs run through the Maryland Energy Administration: HEAR, income-based rebates (roughly 150% of area median income and below, largest amounts below 80%) applied toward heat pumps and electric appliances, and HOMES, keyed to measured whole-home energy savings.

The MEA also runs its own periodic grant and incentive programs worth a check at project time, and income-qualified households should know Maryland's weatherization pathways cover substantial work at no cost for those who qualify.

The Stacking Question

Maryland's depth creates the four-state series' most common question: can EmPOWER rebates, state Home Energy Rebates, and manufacturer promotions combine on one project?

The honest answer: often partially, never automatically. Each program sets its own rules about combining with the others, and the same heat pump can't always collect from every pot. The sequence that avoids disappointment is mapping the stack before purchase: confirm which programs your household and equipment qualify for, check each one's combination rules, and let the documentation requirements drive the timeline.

Between utility tiers, income bands, and equipment lists, Maryland's paperwork is the thickest of the four states, and it pays the best when it's done right.

Want the stack mapped before you commit? Sorting EmPOWER tiers, MEA rebates, and qualifying equipment lists is exactly what our comfort advisors do on every Maryland estimate — it's built in, not extra. Horizon has served parts of Maryland since 1987 with upfront pricing and free replacement estimates. Call 800-642-4419 or start with our heat pump replacement team.

Get Every Dollar You Qualify For

EmPOWER's standing machine plus the newer state-run rebates make Maryland one of the strongest incentive environments in Horizon's footprint for 2026. We track what's live per utility so you don't have to, and our own current offers stack on top of the public programs.

Call 800-642-4419 or book a free estimate online today.

Frequently Asked Questions

What rebates does Maryland offer for heat pumps in 2026?

EmPOWER Maryland rebates through your electric utility (BGE, Delmarva Power, Potomac Edison, Pepco, or SMECO) lead the list, with Maryland's income-based Home Energy Rebates layering on for qualifying households. Maryland's electrification policy has made heat pumps the best-rebated equipment category in the state.

What is EmPOWER Maryland?

Maryland's long-running energy efficiency framework, funded through utility bills and delivered as rebates, home performance programs, and efficiency services by each electric utility. It predates the federal programs, survives them, and is the first place Maryland homeowners should look when replacing HVAC equipment.

Are there still federal HVAC tax credits in 2026?

Not for new installations: the 25C and 25D credits ended for equipment placed in service after December 31, 2025. The surviving federal support is the Home Energy Rebates, administered in Maryland by the state energy administration, plus everything EmPOWER already offers.

Can I still claim my 2025 installation on my taxes?

Yes, if the equipment was installed and operational by December 31, 2025: file IRS Form 5695 with your 2025 return by April 15, 2026, keeping the dated invoice, AHRI certificate, and manufacturer certification. Later installs no longer qualify. Confirm specifics with your tax professional.

Who qualifies for Maryland's income-based energy rebates?

The HEAR rebates serve households under roughly 150% of area median income, with the largest amounts below 80%. Verification runs through the state's program, and the rebates apply toward heat pumps and electric appliances. Maryland's weatherization programs add a no-cost pathway for eligible households.

Can EmPOWER rebates be combined with other programs?

Sometimes, and never automatically: each program sets its own rules about stacking with state rebates and manufacturer promotions, and the same equipment can't always collect from every source. Map the combination before purchasing, or have your contractor confirm the stack during the estimate.