Updated September 15, 2026. Sources: IRS credit guidance and the change to the deadline.
If you're planning to replace your air conditioner, there's an important change: the federal Energy Efficient Home Improvement Credit ended for equipment placed in service after December 31, 2025. If your qualifying system was installed in 2025, you may still be able to claim the credit on your 2025 tax return. Here's what Florida homeowners need to know about AC tax credits in 2026.
Federal Energy Efficient Home Improvement Credit
The Inflation Reduction Act originally extended these credits through 2032, but federal law changed in 2025. Section 25C now covers qualifying equipment placed in service through December 31, 2025. For eligible 2025 work, the credit was generally 30% of qualifying costs, with limits depending on the equipment.
Key Details for Eligible 2025 Work:
- ✓ 30% of qualifying costs, including eligible installation labor, subject to the limits below
- ✓ Up to $2,000 for qualifying heat pumps, within the combined annual limit for heat pumps and certain other equipment
- ✓ Up to $600 per item for qualifying central air conditioners
- ✓ Up to $600 per item for qualifying furnaces and boilers
- ✓ Up to $150 for a qualifying home energy audit
- ✓ Central AC, furnace, audit, and other qualifying improvement credits also share a $1,200 annual limit; the separate heat-pump limit is $2,000
Important: This is a tax credit, not a deduction. A credit directly reduces the amount of tax you owe dollar for dollar, making it more valuable than a deduction. However, it is non-refundable, meaning it can only reduce your tax liability to zero but won't generate a refund beyond that. Any unused Section 25C credit cannot be carried forward to a later tax year.
What HVAC Systems Qualified in 2025?
Not every AC unit installed in 2025 qualified. Eligibility depends on the exact equipment, when it was placed in service, and the 2025 efficiency requirements. Check the manufacturer's documentation for your model against the IRS rules.
Central Air Conditioners
2025: up to $600The system had to meet the CEE highest efficiency tier, excluding any advanced tier, in effect at the beginning of 2025. Check the exact equipment combination and the manufacturer's certification; a SEER2 number alone does not establish eligibility.
Heat Pumps (Ducted & Ductless)
2025: up to $2,000Qualifying ducted and ductless heat pumps had to meet the CEE highest efficiency tier, excluding any advanced tier, in effect at the beginning of 2025. Check the manufacturer's certification for the specific matched system.
Furnaces
2025: up to $600Qualifying gas and propane furnaces had to meet the applicable 2025 CEE efficiency tier. Oil equipment has separate IRS criteria. Check the manufacturer's certification for the exact model before claiming a credit.
Does a New AC Unit Installed in 2026 Qualify?
Not for the federal Section 25C credit. A new system placed in service in 2026 does not qualify, even if it meets the old efficiency requirements. Filing a tax return in 2026 for eligible 2025 work is a different situation.
When you get a quote from us for a new AC installation, we always present options at different efficiency levels and price points. We'll help you compare the equipment and any current rebate programs so you can make a decision using the savings actually available to you.
Pro tip: Compare the full installed price, expected energy use, and confirmed rebates. An expired federal credit should not be part of a new 2026 quote.
Florida AC Replacement Programs and Rebates
Florida homeowners may still have access to other savings. Check each program's current terms before counting on it:
Utility Company Rebates
Many Florida utility companies offer rebates for upgrading to high efficiency HVAC equipment. Check with your local utility (Duke Energy, Tampa Electric, etc.) for current rebate programs. Confirm the amount, eligible equipment, and application steps before installation.
IRA Home Energy Rebates
State-administered home energy rebates have separate eligibility and application rules. Check Florida's current program status before including a rebate in your budget.
Manufacturer Rebates
Equipment manufacturers frequently offer seasonal rebates on qualifying systems. These promotions change throughout the year; ask about current dates, eligible models, and whether an offer can be combined with a utility rebate.
How to Claim a Credit for Eligible 2025 Work
If your qualifying equipment was placed in service in 2025, here's what to gather before preparing or reviewing your 2025 tax return:
Save Your Documentation
Keep invoices, receipts, installation dates, model details, and the manufacturer's certification. For specified property installed in 2025, obtain the qualified manufacturer identification number (QMID) required by the IRS. Contact us if you need a copy of your installation paperwork.
Use the 2025 IRS Form 5695
Claim eligible 2025 HVAC work in Part II of the 2025 Form 5695 with your 2025 federal return. If you already filed and missed an eligible credit, ask your tax professional whether an amended return is appropriate.
Consult a Tax Professional
Tax laws are complex and individual situations vary. We recommend consulting with a qualified tax professional to confirm eligibility and file correctly.
Ready to explore energy efficient AC systems and current rebates? Call us for a free in home estimate:
727-327-7355 (Port Richey) | 352-720-8636 (Spring Hill)
Disclaimer: This article is for informational purposes only and does not constitute tax advice. Please consult a qualified tax professional regarding your specific tax situation and eligibility for credits.
