The IRA HVAC Tax Credits Ended: What Minnesota Homeowners Can Still Get

Yes. The federal 25C and 25D tax credits ended for equipment placed in service after December 31, 2025, so a heat pump, furnace, central air conditioner, boiler or geothermal system installed in 2026 doesn't qualify. The Inflation Reduction Act's other homeowner program, the income-limited Home Energy Rebates, still exists, but Minnesota's version hasn't launched. What's left for a Minnesota HVAC project in 2026 is mostly utility rebates from Xcel Energy, CenterPoint Energy and the electric co-ops. Western Wisconsin households have one more option, because Focus on Energy's HEAR program is open to income-qualified homes.

This page used to be a guide to claiming the federal credits. That guide is out of date, so this is what replaced it: what ended, what the law says, and where the remaining money comes from.

Which federal HVAC tax credits ended, and when?

Two federal credits covered most home HVAC work, and both ended after December 31, 2025.

• The 25C credit ended for any property placed in service after December 31, 2025. The Energy Efficient Home Improvement Credit covered heat pumps, central air conditioners, gas furnaces, boilers and home energy audits.
• The 25D credit ended on the same date. The Residential Clean Energy Credit covered geothermal heat pumps, along with solar and some other equipment.

Both were cut off by Public Law 119-21, signed July 4, 2025. The IRS explains how the credits ended in its FAQ on the new law. We found no federal credit for homeowner HVAC work in 2026.

What does "placed in service" mean for the federal credits?

The deadline turns on when the equipment was installed and ready to use, not when you signed a contract or paid a deposit. For 25D, the IRS says a system whose installation was completed after December 31, 2025 can't be claimed. A furnace ordered in November 2025 and installed in January 2026 falls on the wrong side of the line.

If your equipment went in during 2025 or earlier, that's a question for your tax preparer, not your HVAC contractor. Bring the final invoice and the manufacturer's certification statement.

Where each program stands in 2026

The IRA Home Energy Rebates: Minnesota waits, Wisconsin is open

The Inflation Reduction Act also funded two rebate programs that states run: HEAR (Home Electrification and Appliance Rebates) and HOMES (whole-home efficiency rebates). They are rebates, not credits, and they're income-limited. That part of the law is still standing, but each state has to launch its own program.

Minnesota's version has not launched. The Department of Commerce runs it as Save Energy Minnesota, which bundles HEAR and HOMES with the state-funded heat pump and electrical panel rebates the Legislature approved in 2023, designed to stack with the federal ones. The page's June 12, 2026 update says the program is waiting for formal approval from the U.S. Department of Energy, has no estimated launch date, and that new DOE rules will change how HEAR and HOMES work in Minnesota. Commerce also warns that unexpected calls, texts, online ads or door-to-door visits about the program are likely scams. Anyone telling a Minnesota homeowner they can get this money today is wrong. Our Minnesota heat pump rebate update tracks it.

Wisconsin's version is open. Focus on Energy runs HEAR for income-qualified households, under 150% of area median income, with a higher tier under 80%. Most of its rebates require an IRA Registered Contractor. As of September 1, 2026, Focus on Energy says it can no longer accept retail post-purchase or instant discount coupon requests for equipment replacing fossil fuel appliances. It also says projects that get HEAR or HOMES rebates may qualify for its regular rebates too. That's the program to check in Hudson, River Falls, Prescott and the Town of Oak Grove.

What HVAC rebates are left in Minnesota in 2026?

With the federal credits gone and the state rebates on hold, utility programs carry most of the load in 2026. Which one applies depends on your address. CenterPoint Energy supplies natural gas in Minneapolis and much of the metro. Xcel Energy supplies gas and electricity in Saint Paul and electricity across much of the metro, and co-ops and municipal utilities serve many other towns.

• Xcel Energy offers heat pump rebates through its Trade Partner Network, with a do-it-yourself option for mini-splits, plus central AC rebates through participating contractors and gas furnace rebates where Xcel supplies the gas. It also lists a reduced electric space-heating rate for customers who heat mainly with a heat pump.
• CenterPoint Energy offers heating system rebates where you choose the dealer, plus a rebate for a ducted heat pump paired with a 92% or higher AFUE gas furnace. Our CenterPoint rebate guide covers the furnace side.
• Electric co-ops such as Dakota Electric and Connexus Energy run their own heat pump and AC programs; our Dakota County guide walks through one example.

Some utility and manufacturer pages still mention federal tax incentives next to their rebates. That part is stale, because those credits ended. Our Xcel and CenterPoint rebate map sorts out which program covers which equipment.

How to check what your project can still get

1. Find your utilities. Look at your gas and electric bills. Each utility runs rebates for its own customers, so the programs open to you depend on who supplies each one.
2. Get exact model numbers. Programs judge the AHRI rating of the matched system, so a quote that names only the outdoor unit isn't enough.
3. Read each program's contractor rule. Some Xcel and Dakota Electric rebates need a registered contractor. CenterPoint lets you use the dealer of your choice. Focus on Energy HEAR mostly needs an IRA Registered Contractor.
4. Check the deadline. Xcel's heat pump installs must be finished by December 31, 2026, with applications accepted through September 30, 2027. CenterPoint wants the application in the same calendar year as the install.
5. Keep the paperwork. Hold on to the final invoice, the AHRI certificate and the startup sheet until every rebate is paid.

Does this change what you should buy?

Less than you'd think. The old credit nudged some people toward a heat pump they might not have picked otherwise, and a few toward oversized or top-tier equipment chasing a bigger number. Without it, the choice comes back to the house: fuel prices, your electric rate, how long you'll stay, and comfort.

For most Minnesota homes with gas, a dual-fuel system still makes sense: a heat pump for spring, fall and milder winter days, and a furnace for deep cold. Homes on propane or electric resistance heat have the strongest case for a cold-climate heat pump, credit or not. Geothermal lost the most, since 25D ended along with the rest, and our geothermal cost guide covers where it still pencils out.

One practical check: if a quote, ad or financing sheet you get in 2026 still subtracts a federal credit to show a lower net price, ask for the number without it. A net price built on a credit that ended is wrong. The same goes for utility rebates. A good quote lists each rebate as a separate item you'll apply for, with the program named and its contractor rule noted, instead of folding it into the price as if it were guaranteed.

What does a new HVAC system cost now that the tax credit is gone?

Without a federal credit, the installed price is the price, and any utility rebate comes off only after you qualify and apply. Our installed ranges are $7,500–$14,500 for a heat pump, $4,500–$9,500 for a furnace, $5,200–$9,800 for central AC and $4,200–$12,500 for a ductless mini-split, each with a written, flat-rate quote first. Our heat pump installation cost guide explains what moves a heat pump within that range, and our Minneapolis HVAC cost guide shows how a replacement quote breaks down in the city.

What to do next

If you're replacing equipment this year, get a written quote with exact model numbers, then check each rebate program's rules before you sign, including whether it needs a registered contractor. We help with utility rebate paperwork where the program allows it. Call 612-429-3465, open 7 days, 7am–9pm.

Questions

Sources

• FAQ on the new law irs.gov
• Save Energy Minnesota mn.gov
• U.S. Department of Energy energy.gov
• AHRI Directory of Certified Product Performance ahridirectory.org