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

The federal 25C and 25D tax credits ended for equipment placed in service after December 31, 2025, but Pennsylvania homeowners still have real options in 2026: claim a qualifying 2025 installation on the 2025 return (Form 5695, due April 15), watch for Pennsylvania's launch of the federal Home Energy Rebates, and use the utility rebates PECO, PPL, and the state's other utilities run year-round. Verify program status before you buy.

On this page:

• What Changed: The Federal Credits Ended

• Installed in 2025? Claim It Now

• Pennsylvania's Programs in 2026

• How to Actually Capture a Rebate

• FAQs

A rowhome boiler in Delaware County and a heat pump swap in Bucks County have one thing in common this year: neither gets the federal tax credit that expired in December.

What Pennsylvania homeowners get instead is a state story with an actual headline, because PA is one of the states bringing the new federal rebate money online in 2026.

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.

"Placed in service" is the phrase that decides it: the credit follows the installation date, not the contract or payment date. A system installed this year earns no federal credit, no matter what an article written in 2024 promises.

What survived: the federally funded Home Energy Rebates that run through state governments, and every state and utility program. In Pennsylvania, both halves matter this year.

Installed in 2025? Claim It Now

If your qualifying equipment was installed and operational by December 31, 2025, the credit is earned; this filing season is when you collect it.

File IRS Form 5695 with your 2025 federal return by April 15, 2026, supported by the installation invoice showing the in-service date, the AHRI certificate, and the manufacturer's certification statement. Your installer supplies all three; Horizon customers can request the package with one call.

As always: educational information, not tax advice. Your tax professional gets the final word on your return.

Pennsylvania's Programs in 2026

The Home Energy Rebates: Pennsylvania's launch year

The IRA's rebate programs survived the 2025 law, and Pennsylvania is among the states slated to bring the income-based HEAR rebates online in the first half of 2026, with the whole-home HOMES pathway on its own track. HEAR targets households under roughly 150% of area median income with substantial point-of-sale rebates on heat pumps and electric appliances. The Pennsylvania DEP's Inflation Reduction Act page is the official source for launch status and program details.

The practical advice writes itself: if your household may income-qualify and your system can limp a little longer, confirm the program's status before you commit, because launch timing determines whether your project captures it.

Your utility's rebates (the year-round layer)

Pennsylvania's Act 129 requires the big electric utilities to run efficiency programs, which is why utility rebates here refresh in multi-year phases. For Horizon's Southeastern PA footprint that means PECO for most of the Philadelphia region (start with PECO's Ways to Save) and PPL toward the Lehigh Valley, whose residential rebate catalog typically covers heat pumps, smart thermostats, and efficiency upgrades. Gas customers should also check PGW and UGI residential programs.

Income-qualified pathways

PA's weatherization assistance and utility low-income programs (like PECO's LIURP) remain the strongest option for eligible households, covering efficiency work at reduced or no cost. One paragraph of your project research should be confirming whether you qualify, because these programs are chronically under-used.

How to Actually Capture a Rebate

Check status before signing. Program budgets are finite and phase boundaries matter in PA specifically.

Confirm the equipment tier. Rebates key to specific efficiency ratings; near-misses get nothing. Your contractor can match models to live requirements in minutes.

Mind the participating-contractor rules. Assessment-based and income-based programs usually require registered contractors.

Document everything. Invoices, model and serial numbers, application confirmations. Rebates are won on paperwork.

Trying to time a replacement against a program launch? That's a judgment call our comfort advisors make with Southeastern PA homeowners every week — what's live, what's pending, and whether your system can wait for it. Horizon has served Southeastern Pennsylvania 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

Between the 2026 rebate launch, Act 129 utility programs, and income-qualified pathways, Pennsylvania's money moved; it didn't disappear. Horizon tracks what's live so you don't have to, and our own current offers stack on top of public programs.

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

Frequently Asked Questions

Are there still HVAC tax credits in Pennsylvania in 2026?

Not federal ones for new installs: the 25C and 25D credits ended for equipment placed in service after December 31, 2025. Pennsylvania's remaining money is the state-run Home Energy Rebates launching in 2026, utility rebates under Act 129, and income-qualified assistance programs.

When do Pennsylvania's Home Energy Rebates launch?

Pennsylvania is among the states slated to launch the income-based HEAR rebates in the first half of 2026, with details administered by the state. Because timing determines eligibility, check the program's current status before committing to a project, or have your contractor confirm what's live.

What rebates does PECO offer for heat pumps?

PECO runs residential efficiency rebates under Pennsylvania's Act 129 framework, typically covering high-efficiency heat pumps, smart thermostats, and related upgrades, with offerings that refresh between program phases. Check PECO's current residential rebate catalog, or ask your installer to match your project against it.

Can I still claim my 2025 HVAC installation on my taxes?

Yes, if it 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. Installations completed in 2026 no longer qualify. Confirm your specifics with a tax professional.

Who qualifies for the HEAR income-based rebates?

Households under roughly 150% of their area median income, with the largest rebates reserved for those under 80%. Income verification runs through the state program, and rebates apply at purchase on qualifying heat pumps and electric appliances once Pennsylvania's program is live.

Do rebates require a participating contractor?

Frequently, yes: income-based and whole-home programs typically pay only when registered or participating contractors do the work, and every program depends on installer-generated documentation. Confirm participation before work begins rather than after.