The federal 25C credit ended after 2025
The Energy Efficient Home Improvement Credit (section 25C) used to cover 30% of a qualifying heat pump, up to $2,000. The 2025 federal budget law (Public Law 119-21) ended it for property placed in service after December 31, 2025. The IRS now describes the credit as applying to property placed in service from January 1, 2023 through 2025.
If your system was installed in 2025, you can still claim it on your 2025 return using IRS Form 5695. A system installed in 2026 doesn't qualify.
What Austin homeowners can still get
If you're an Austin Energy customer, its residential rebates for high-efficiency AC and heat pump replacements are still listed in 2026, in tiers based on efficiency. Requirements include a home and existing system at least 10 years old, a properly sized system, full replacement of indoor and outdoor equipment, City permits, and an Austin Energy participating contractor. Austin Energy's pages list different amounts depending on the program, so check its site for the current figure before you count on it.
Outside Austin Energy territory
Much of the metro isn't on Austin Energy. Round Rock, Pflugerville and Hutto are mostly Oncor (retail choice), Cedar Park, Leander, Kyle and Buda are on Pedernales Electric Cooperative, and Georgetown has its own city utility. Their programs vary and change, so ask your contractor to check before you buy, and get it in writing.
State rebates
Texas's federally funded home energy rebate programs had not launched for homeowners as of mid-2026. If they open, we'll update this page.
Sources: IRS: Energy Efficient Home Improvement Credit · Austin Energy AC and heat pump rebates · Austin Energy Home Energy Savings