No. The federal 25C credit does not apply to a heat pump or AC installed in 2026. The IRS covers qualifying property placed in service on or after January 1, 2023 and before December 31, 2025. Don’t count on it in a 2026 budget. Climate Pros Tucson matches you with licensed pros who can quote the job and tell you which local programs still apply.

What happened to 25C?

Public Law 119-21, the One Big Beautiful Bill Act enacted July 4, 2025, ended the credit (section 70505). For qualifying 2025 installs, the annual limit for heat pumps was $2,000 and the credit was nonrefundable. The IRS keeps the rules on its energy efficient home improvement credit page. Tax questions go to a tax professional.

Does 25D, the geothermal credit, still exist?

No. The residential clean energy credit, 25D, includes geothermal heat pumps. The IRS says it is not available for property placed in service after December 31, 2025. See the IRS page.

Does Arizona have its own HVAC tax credit?

No. Arizona’s state credit under A.R.S. 43-1083 covers solar energy devices only. It does not cover heat pumps or AC.

What help is left in Tucson?

TEP’s Efficient Home Program is active. As listed by TEP in October 2026, it offers up to $720 for a heat pump quality installation and up to $600 for an AC quality installation, taken off the price through a participating contractor. Amounts change, so confirm before you sign. The full table is in our TEP rebates guide.

Arizona’s HEAR rebates through Efficiency Arizona are live but narrowed, and serve low- to moderate-income households. They no longer pay to replace gas appliances with electric ones under DOE guidance effective September 1, 2026. See the rebate stack for how programs combine.

How should you buy in 2026?

Treat any rebate as a bonus, not the reason to buy. Ask the pro for a written quote that shows equipment model numbers and any rebate paperwork. A contractor who promises a federal credit for a 2026 install is wrong. Compare the work, not the incentive. For the product decision itself, see heat pump vs AC and heat pump service. The Tucson HVAC hub lists our coverage.

When to call us

Call (520) 353-2520 and we’ll match you with a licensed local pro. Check the pro’s license at roc.az.gov before you sign.