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

The federal 25C and 25D tax credits ended for equipment placed in service after December 31, 2025, but New Jersey remains one of the best rebate environments in the country. In 2026, NJ homeowners can still claim qualifying 2025 installs on the 2025 return (Form 5695, due April 15) and tap the NJ Clean Energy Program's whole-home and HVAC incentives plus utility programs. Most whole-home rebates start with an energy assessment, so plan the sequence before you buy. 

On this page:

• What Changed: The Federal Credits Ended

• Installed in 2025? Claim It Now

• New Jersey's Programs in 2026

• The Assessment-First Sequence

• FAQs

Losing the federal credit stings less in New Jersey than almost anywhere else.

That's because the state built its own machine, and for South Jersey homeowners replacing heating and cooling equipment in 2026, the state machine is where the real money now lives.

What Changed: The Federal Credits Ended

Federal legislation passed in July 2025 ended the Energy Efficient Home Improvement Credit (25C) and Residential Clean Energy Credit (25D) for property placed in service after December 31, 2025. The trigger is the installation date, not the contract or payment date, so 2026 installs earn no federal credit. 

What the law didn't touch: New Jersey's own programs, utility incentives, and the federally funded Home Energy Rebates that run through state governments. New Jersey's versions of all three are active territory this year.

Installed in 2025? Claim It Now

Equipment installed and operational by December 31, 2025 still earns its federal credit, claimed on the 2025 return you file by April 15, 2026 using IRS Form 5695. 

Assemble the paperwork now: the dated installation invoice, the AHRI certificate, and the manufacturer's certification statement. Horizon customers can request all three with one call. And since this is educational information rather than tax advice, confirm the details with your tax professional.

New Jersey's Programs in 2026

The NJ Clean Energy Program

The state's flagship, and the reason NJ leads this series. The NJ Clean Energy Program's residential pathways include whole-home energy rebate programs (substantial rebates keyed to the scope of efficiency improvements, with the largest amounts for income-qualified households) and HVAC/water-heating incentives with a strong heat pump emphasis, paired with attractive financing for qualifying projects.

Your utility's programs

Utility incentives layer on top for many households. In Horizon's South Jersey footprint that primarily means Atlantic City Electric and South Jersey Gas; customers on the northern edge should check PSE&G's substantial efficiency and electrification programs. Each utility's catalog covers different equipment, and the stacking rules with the state program are program-specific. 

The federal Home Energy Rebates in NJ

The IRA's HEAR (income-based) and HOMES (performance-based) rebates survived the 2025 law and flow through state administration; the NJDEP's clean energy incentives page tracks the state's current lineup. 

The Assessment-First Sequence (Read Before You Buy)

Here's the practical detail competitors bury: New Jersey's richest rebates generally start with a home energy assessment, and the incentive follows the assessment's recommendations. Order the equipment first and you can disqualify the project from the very program that would have funded it.

The sequence that works: assessment first, then scope the project against what the program rewards, then install with a participating contractor, then submit with complete documentation. It adds a step at the front and thousands of reasons to tolerate it.

Everything else from the series playbook applies here too: check program budgets before signing, match equipment to the qualifying efficiency tiers exactly, and keep every document from assessment to invoice.

Planning a replacement in Sewell, West Deptford, Burlington, or anywhere in South Jersey? The assessment-first sequence rewards homeowners who plan it right, and walking that sequence is what our comfort advisors do — from qualifying equipment tiers to timing against program budgets. Horizon has served South Jersey 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

New Jersey kept its money local, and in 2026 that's good news: the Clean Energy Program, utility incentives, and state-run federal rebates add up to the strongest package in Horizon's footprint. Our own current offers stack on top.

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

Frequently Asked Questions

What HVAC rebates does New Jersey offer in 2026?

The NJ Clean Energy Program's whole-home and HVAC incentives lead, with a strong heat pump emphasis and the largest rebates for income-qualified households, plus utility programs from Atlantic City Electric, South Jersey Gas, and PSE&G. Amounts change with program budgets, so verify current figures before committing.

How do the NJ whole-home energy rebates work?

They're assessment-driven: a home energy assessment identifies qualifying improvements, the rebate scales with the scope of work and household income, and a participating contractor completes it. Doing the assessment before purchasing equipment is what keeps the project eligible for the largest amounts.

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 money is the Home Energy Rebates administered through the states, which in New Jersey operates alongside the established Clean Energy Program.

Can I still claim my 2025 installation on my taxes?

Yes, if it was installed and running by December 31, 2025: file IRS Form 5695 with your 2025 return by April 15, 2026, supported by the dated invoice, AHRI certificate, and manufacturer certification. A 2026 installation no longer qualifies. Confirm the details with your tax professional.

Do I need an energy assessment before getting a rebate?

For New Jersey's whole-home pathways, effectively yes: the assessment defines the qualifying scope, and equipment purchased before it can fall outside the program. Simple single-equipment utility rebates are looser, but when in doubt, assess first. It's the cheapest step in the entire project.

Can utility rebates be combined with state programs?

Often, but stacking rules are program-specific: some utility incentives layer cleanly on state rebates, others exclude equipment already rebated elsewhere. Confirm the combination for your exact project before counting both, or have your contractor map it during the estimate.