Critical Update for 2026
Mini Split Rebates and Tax Credits in 2026: What Actually Remains
Quick Answer: What Can You Still Claim in 2026?
Federal 25C Tax Credit
Expired Dec 31, 2025
Mini splits installed in 2026 are not eligible for the former $2,000 federal tax credit
HOMES State Rebates
Up to $8,000
Live in a growing number of states, plus utility rebates of $300 to $1,500 that stack
Availability varies by state: HOMES and HEEHRA rebates are administered by individual state energy offices, and some states have already reserved their current funding. In the mid-2026 snapshot in the table below, Massachusetts shows both HOMES and HEEHRA live.
The Section 25C Tax Credit Has Expired
The Energy Efficient Home Improvement Credit (Section 25C) expired on December 31, 2025. Mini splits installed in 2026 are not eligible for the $2,000 federal tax credit that was available from 2023 through 2025.
Many competing guides still reference this credit. If a guide tells you that you can claim a $2,000 tax credit for a mini split in 2026, it has not been updated. Check the date of any guide you read.
HOMES Rebate Program (Up to $8,000)
The Home Owner Managing Energy Savings (HOMES) rebate program is funded by the Inflation Reduction Act and administered by individual states. It provides rebates for whole-home energy efficiency improvements, including heat pump HVAC systems like mini splits.
Maximum Rebate
Up to $8,000
Where It Is Live (mid-2026)
Select states
How it works: You install an ENERGY STAR-certified heat pump system and demonstrate energy savings through a home energy audit. The rebate amount depends on the projected energy savings: 50% of project cost for 20% energy reduction, or 80% of project cost for 35%+ reduction, up to the maximum.
How to check your state: Visit the Department of Energy HOMES rebate tracker or your state energy office website. HOMES has launched in fewer states than the HEAR/HEEHRA program below, and availability moves quickly: California, for example, reserved its full HEAR allocation by February 2026 and put new requests on a waitlist. Treat any status list, including the one below, as a snapshot and confirm with your state energy office before counting on a rebate.
HEEHRA Program (Income-Based)
The High-Efficiency Electric Home Rebate Act (HEEHRA) provides additional rebates for lower-income households. These stack on top of HOMES rebates.
| Household Income | Rebate Coverage | Max for Heat Pump HVAC |
|---|---|---|
| Under 80% of Area Median Income | Up to 100% of project cost | $8,000 |
| 80% to 150% of Area Median Income | Up to 50% of project cost | $8,000 |
| Over 150% of Area Median Income | Not eligible for HEEHRA | $0 |
Area Median Income (AMI) varies by location. A household at 80% AMI in the median US market earns roughly $55,000 to $65,000 for a family of four. Check your local AMI using the HUD income limits tool.
HOMES/HEEHRA Status by State (mid-2026 snapshot)
Programs roll out on different timelines and can change month to month. This table covers the largest states. "Reserved" means the state launched but has already committed its current funding (California reserved its HEAR allocation in February 2026 and waitlisted new requests). Always confirm with your state energy office before counting on a rebate.
| State | HOMES Status | HEEHRA Status |
|---|---|---|
| California | Live | Reserved |
| New York | Live | Live |
| Texas | Pending | Pending |
| Florida | Pending | Pending |
| Pennsylvania | Pending | Pending |
| Illinois | Live | Live |
| Ohio | Pending | Pending |
| Georgia | Live | Pending |
| Massachusetts | Live | Live |
| Colorado | Live | Live |
| Washington | Live | Live |
| Arizona | Pending | Not yet |
Utility Company Rebates
Many electric utilities offer their own rebates for energy-efficient HVAC equipment, separate from federal programs. These typically range from $300 to $1,500 per system.
Key point: Utility rebates often stack with HOMES/HEEHRA rebates. You could potentially receive $8,000 in federal rebates plus $1,000+ from your utility for the same installation.
Search "[your utility name] heat pump rebate" or check the DSIRE database (Database of State Incentives for Renewables and Efficiency) to find programs in your area.
Geothermal: The 30% Credit Also Ended
Geothermal heat pumps (ground-source) used to qualify for a 30% federal tax credit under Section 25D, which earlier guides projected would run through 2032. The One Big Beautiful Bill Act (signed July 2025) cut that short: Section 25D expired for systems placed in service after December 31, 2025, the same cutoff that ended Section 25C. Homeowners who completed a geothermal install by the end of 2025 can still claim the 30% credit on their 2025 return (Form 5695), but installs in 2026 get no federal residential credit. Geothermal systems cost $15,000 to $35,000 installed and remain the highest-efficiency heating/cooling option, but the tax credit is no longer a reason to choose one over a mini split in 2026.
What Qualifies for Rebates
- 1. ENERGY STAR certified: The mini split must meet ENERGY STAR efficiency requirements. Most units from major brands qualify. Check the ENERGY STAR product finder.
- 2. Licensed contractor installation: Most rebate programs require a licensed HVAC contractor to perform the installation. DIY installations may not qualify.
- 3. Home energy audit (HOMES): The HOMES program typically requires a pre- and post-installation energy audit to verify savings.
- 4. Proper documentation: Keep all receipts, contractor invoices, product spec sheets, and audit reports. Rebate processing requires documentation.
How to Maximize Your Savings
1. Stack programs: HOMES + utility rebate can exceed $9,000 in total rebates on a single installation.
2. Install during shoulder season: Spring and fall installations are 10 to 15% cheaper due to reduced demand.
3. Bundle efficiency upgrades: Some HOMES programs offer larger rebates when you combine HVAC with insulation, air sealing, or water heater upgrades.
4. Get multiple quotes: Three quotes minimum. Make sure each quote includes the same scope of work so you are comparing apples to apples.
5. Check income eligibility: HEEHRA can cover up to 100% of project cost for qualifying households. Even moderate-income households may qualify for 50% coverage.