Accurate as of August 2026. HVAC incentive programs change often — this article was rewritten to reflect what’s actually true right now, replacing an earlier version that assumed a federal credit that has since expired. If you’re reading this later and something below looks off, contact us and we’ll confirm what’s current.
If you searched for “HVAC tax credits in 2025,” here’s the most important thing to know before anything else: the federal tax credit that article would have pointed you to no longer exists for equipment installed in 2026. What’s below explains what changed, and — more usefully — what’s actually still available to Arizona homeowners right now.
What Changed: The Federal 25C Credit Is Gone
Through 2025, the federal Energy Efficient Home Improvement Credit (Section 25C) let homeowners claim up to $3,200 a year for qualifying upgrades — up to $2,000 (30% of cost) for a heat pump, or up to $1,200 for other qualifying equipment like a high-efficiency air conditioner or furnace. It had originally been extended through 2032 under the 2022 Inflation Reduction Act.
That extension was cut short. Federal budget legislation passed in 2025 (the One Big Beautiful Bill Act) terminated the 25C credit early — it’s only available for equipment installed and placed in service on or before December 31, 2025. If your new AC, furnace, or heat pump was installed in 2026, this specific credit isn’t available to you, regardless of how efficient the system is.
One exception worth knowing: if you installed qualifying equipment before that December 31, 2025 cutoff, you can still claim the 25C credit on the tax return you file for that year — this only affects installations happening from 2026 onward.
What’s Actually Still Available in Arizona Right Now
The federal tax credit is gone, but it wasn’t the only program — and the ones below are still real and active as of this writing.
SRP Cool Cash Rebate — still active
If you’re an SRP residential electric customer, the Cool Cash Rebate is still running: $75 per ton for a single-stage system, $150 per ton for multi-stage, and $225 per ton for a variable-capacity or inverter-driven system — up to roughly $1,125 back on a typical 5-ton install. Confirm current terms directly with SRP, since utility rebate programs are periodically revised.
Arizona HEAR Program (Efficiency Arizona) — still active, income-qualified
Arizona was one of the first states to launch its Home Electrification and Appliance Rebate (HEAR) program, branded Efficiency Arizona, administered by the Governor’s Office of Resiliency. It offers up to $14,000 in rebates for qualifying households — covering heat pumps along with other electrification upgrades — with up to 100% of costs covered for lower-income households and up to 50% for moderate-income households. This is a real, currently-operating program, but it’s income-qualified, not available to every homeowner. Check your eligibility and apply directly at efficiencyarizona.com.
APS rebates — discontinued
If you’re an APS customer, don’t expect a residential HVAC rebate from them right now: APS eliminated its residential energy-efficiency rebate programs, including the “Home Energy Savings” rebate that used to apply to HVAC upgrades, effective January 1, 2026.
What This Means If You’re Planning an Install
The math on a new system in 2026 looks different than it did in 2025 — there’s no federal credit to offset the cost anymore, unless you qualify for the income-based HEAR program. For most homeowners, SRP’s Cool Cash Rebate (if you’re an SRP customer) is the most straightforward real incentive left. It’s still worth asking about efficiency tiers and rebate eligibility before you choose a system, since that’s real money either way.
Frequently Asked Questions
Is there any federal tax credit for a new AC or furnace installed in 2026?
Not currently. The 25C credit that covered this ended for equipment installed after December 31, 2025.
Can I still claim a credit if I installed my system in 2025?
Yes — if the equipment was installed and placed in service by December 31, 2025, you can still claim the 25C credit on that tax year’s return.
What’s the single best incentive available to most homeowners right now?
For most non-income-qualified SRP customers, the Cool Cash Rebate. For income-qualified households, the Arizona HEAR program offers significantly more.
Does HVAC Near Me help with rebate paperwork?
We can tell you what your installed system’s efficiency rating qualifies for and provide the documentation you’ll need — call us at (602) 932-0124 to ask before you install.