Here’s What You Need to Know:
If you have been considering a heat pump or heat pump water heater for your home, get your installation in 2025. The federal Energy Efficient Home Improvement Credit, also called the 25C credit, is only available now through December 31, 2025. After that, this $2,000 incentive will be gone.
Here’s how it works – homeowners who install qualifying heat pumps or heat pump water heaters can claim a federal tax credit equal to 30% of the project cost, or up to $2,000 per year. To qualify, the equipment must meet or exceed the highest efficiency tier set by the Consortium for Energy Efficiency (CEE) and must be installed by December 31, 2025.
Heat pumps are some of the most efficient home upgrades available today, providing both heating and cooling in one system. Modern HVAC systems perform reliably even in colder climates (down to -13°!), and homeowners who switch from oil heating often see substantial reductions in their annual energy bills. It’s an ideal solution for Massachusetts and New Hampshire homeowners. Over time, the savings can add up.
The good news for Massachusetts homeowners is that Mass Save® isn’t going anywhere. The Mass Save® program currently offers rebates of up to $10,000 for eligible heat pump installations. These rebates are expected to stay in place after 2025, but the amounts will gradually decrease starting in 2026. Acting now means securing the maximum incentives while they are still available.
The most important detail is timing. To qualify for the federal tax credit, the system must be installed, paid for, and placed in service (in use) by December 31, 2025.
If you’ve been thinking about upgrading, this is the time to do it to get the rebates and tax credit. By installing before the end of 2025, you can lock in these incentives, cut your upfront costs, and start enjoying a cleaner, more efficient heating and cooling system.
Our team at 128 is here to help and is proud to be the top heat pump installer in Massachusetts. Call or message us today to book your no-cost installation consultation and maximize your savings wit the $2,000 heat pump tax credit.
FAQs on Federal Incentives for Heat Pump Ending:
How can I get the $2,000 heat pump tax credit?
To get the $2,000 heat pump tax credit, you must get eligible HVAC equipment installed before 12/31/25. An HVAC professional like 128 Plumbing, Heating, Cooling & Electric should be able to help confirm that the equipment you’re installing is eligible before installing it.
Can I get both the Mass Save rebates and the federal tax credit on a heat pump?
Yes. In Massachusetts, you can still take advantage of both the Mass Save rebates up to $10,000 and the federal tax credit of up to $2,000 for a heating and cooling installation.
Can heat pumps do heating and cooling?
Yes, heat pumps are a great option for year-round use of heating and cooling and doesn’t require ductwork – great for Massachusetts winters and summers.
What happens if I wait to get a heat pump installed until after 2025?
If you wait until after December 31, 2025, you’ll miss out on the federal tax credit of up to $2,000 per year for qualifying heat pump installations. While Mass Save® rebates will still be available, the rebate amounts are scheduled to decrease starting in 2026.
