HVAC Tax Credits in 2026: What Changed After the 25C Expiration and What's Still Available

If you've been researching HVAC upgrades this year, you've probably noticed the landscape looks different. The federal Energy Efficient Home Improvement Credit (Section 25C) — which offered up to 30% back on qualifying HVAC purchases, capped at $3,200 annually — expired on December 31, 2025. The One Big Beautiful Bill Act accelerated its sunset from the original 2032 timeline.

That's a real loss for homeowners. But it doesn't mean incentives have dried up entirely. Oklahoma still has several programs that can knock hundreds or thousands off the cost of a new system. We've been helping homeowners across Central Oklahoma navigate these changes, and here's what we're telling our customers right now.

What Happened to the 25C Tax Credit

The Section 25C credit was part of the Inflation Reduction Act of 2022. It covered 30% of the cost of qualifying energy-efficient home improvements — HVAC systems, insulation, windows, doors, and more. For HVAC specifically, homeowners could claim up to $600 for central air or furnaces, $2,000 for heat pumps, and $3,200 total across all qualifying improvements in a single tax year.

The credit applied to equipment purchased and installed before December 31, 2025. If you installed a qualifying system last year, you can still claim the credit on your 2025 tax return (filed in 2026) using IRS Form 5695. Make sure you have your manufacturer certification statement, dated invoice, and efficiency ratings documentation.

As of January 2026, no federal legislation has reinstated or replaced 25C for residential HVAC improvements.

Federal Incentives Still Available in 2026

While 25C is gone, a couple of federal programs remain relevant:

25D Solar and Geothermal Credit: The Residential Clean Energy Credit (Section 25D) remains active through 2032 at a 30% rate. If you're installing a geothermal heat pump system, this credit still applies. Geothermal systems are a strong fit for Oklahoma — we install ClimateMaster units that qualify. This credit has no annual cap, making it significantly more valuable than 25C was.
HEEHRA Rebates: The High-Efficiency Electric Home Rebate Act (part of the IRA) is a separate program from 25C and was not affected by the same sunset. These point-of-sale rebates — up to $8,000 for heat pump installations — are income-qualified and available through state energy offices. Oklahoma's program launched in late 2025 and is still accepting applications. More on this below.

Oklahoma Utility Rebates

Local utility rebates remain one of the best ways to offset HVAC costs in 2026. These programs change annually based on available funding, so always verify current availability before purchasing.

Oklahoma Natural Gas (ONG) offers rebates for high-efficiency gas furnaces (95%+ AFUE) and for homeowners switching from electric heat to natural gas systems. Rebates range from $550 to $2,500 depending on the equipment and configuration. Applications are post-install and first-come, first-served.

OG&E runs an HVAC Burnout Replacement program with rebates up to $3,000 for qualifying heat pumps and central air conditioners. ENERGY STAR certification is required, and pre-approval is recommended since funds can deplete quickly.

Oklahoma Electric Cooperative (OEC) provides rebates for efficient heat pump installations. Contact them directly for current program details and application requirements.

We work with all these utilities regularly and can tell you upfront whether your planned installation qualifies. We handle the paperwork coordination so you don't have to chase down forms after the fact.

High-Efficiency Electric Home Rebate Program

HEEHRA deserves special attention because it's the largest remaining incentive for heat pump buyers. The program provides point-of-sale rebates (meaning the discount applies at purchase, not at tax time) of up to $8,000 for ENERGY STAR-certified electric heat pump systems.

Key details for Oklahoma homeowners:

Income qualification: Available to households earning up to 150% of area median income, with higher rebate amounts for those at or below 80% AMI
Eligible equipment: Electric heat pumps for space heating and cooling — new installations, replacements of non-electric systems, or first-time primary heating systems
Stackable: HEEHRA rebates can be combined with utility rebates (like OG&E or ONG programs)
Application: Through the Home Energy Rebates Portal via the Oklahoma Department of Commerce

Choosing the Right System Without the 25C Credit

Without the 25C cushion, system selection matters even more. The wrong size or efficiency tier can mean paying a premium that never pays back.

For most Central Oklahoma homes, a heat pump is the strongest value proposition right now. Modern cold-climate heat pumps handle our winters reliably, they qualify for HEEHRA and utility rebates, and they eliminate the need for separate heating and cooling equipment. A dual-fuel setup — heat pump paired with a gas furnace for the coldest days — gives you the best of both worlds.

If you're replacing a gas furnace, look for 95%+ AFUE models that qualify for ONG rebates. The $550-$2,500 rebate on these units partially fills the gap left by 25C.

For geothermal, the 25D credit at 30% with no cap makes this the best-incentivized option available. The upfront cost is higher, but the combination of the tax credit, dramatically lower operating costs, and 20+ year equipment lifespan creates strong long-term ROI. We specialize in geothermal installations across Central Oklahoma and can provide a detailed cost analysis for your property.

Regardless of system type, proper sizing through a Manual J load calculation is non-negotiable. An oversized system wastes money; an undersized one can't keep up. We include this calculation with every installation quote.

Making the Numbers Work

Here's a realistic example for a Central Oklahoma homeowner replacing a 15-year-old central AC and gas furnace with a high-efficiency heat pump system in 2026:

Equipment and installation: $9,000-$12,000 (depending on home size and configuration)
HEEHRA rebate (if income-qualified): Up to $8,000
OG&E rebate: Up to $3,000
Effective cost after rebates: As low as $1,000-$4,000

Even without HEEHRA qualification, the OG&E rebate alone brings a $12,000 system down to $9,000. And the energy savings — typically $40-$80 per month — start compounding immediately.

The 25C credit is gone, but smart system selection combined with available rebates can still make a high-efficiency upgrade very affordable. The key is working with a contractor who knows which programs apply to your specific situation and can handle the documentation.

That's what we do every day at Trinity Climate Control. Give us a call at 405-420-4895 or schedule online for a free consultation. We'll map out the best combination of equipment and incentives for your home.