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Is there still a heat pump tax credit in 2026? (Texas edition)

A lot of HVAC websites still advertise the federal tax credit. For systems installed in 2026, it's gone. Here's what's still on the table in Central Texas.

Updated October 13, 2026 · 4 min read · By the Home Comfort Heroes team

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

FAQ

Quick answers

Still stuck? Call (512) 555-0142 and a real person picks up.

Can I still claim the heat pump tax credit in 2026?

Only for a system placed in service in 2025, claimed on your 2025 return. Systems installed in 2026 don't qualify for 25C.

Do Austin Energy rebates still exist?

Yes, for Austin Energy customers who meet the requirements. Amounts vary by efficiency tier and program, so confirm on Austin Energy's site.

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