Is the 25C Tax Credit Still Available in 2026?
No. The federal 25C Energy Efficient Home Improvement Credit expired December 31, 2025. Equipment placed in service in 2026 does not qualify. Central Illinois homeowners can still use Ameren Illinois instant incentives, which are applied through your contractor instead of your tax return.
What Exactly Changed on January 1, 2026?
Through 2025, the 25C credit let homeowners claim up to 30 percent of the cost of qualifying equipment, capped at $2,000 per year for heat pumps and heat pump water heaters and $1,200 per year for furnaces, air conditioners, insulation, and electrical upgrades. Federal legislation signed in 2025 moved the end date up. Property placed in service after December 31, 2025 no longer qualifies.
Two details trip people up:
- Placed in service, not purchased. Buying equipment in December 2025 and having it installed in January 2026 does not qualify. The install date is what counts.
- 2025 installs still count. If your system was running before the end of 2025, you claim it on the tax return you file for the 2025 tax year.
You can confirm the current status directly with the IRS Energy Efficient Home Improvement Credit page. We are contractors, not tax professionals, so verify your own situation with your preparer.
Why Are So Many Websites Still Advertising the 25C Credit?
Because most of them have not been updated. Search for HVAC tax credits today and you will still find contractor pages, manufacturer landing pages, and blog posts promising $2,000 back on a heat pump. Those pages were written in 2023 and 2024 and nobody went back to fix them.
This matters more than it sounds. Homeowners are budgeting a replacement around a $2,000 credit that no longer exists, then finding out at tax time. If a contractor quotes you a system and leans on the federal credit to justify the price, ask them to put the credit in writing with the current IRS citation. Most will not, because they cannot.
What Rebates Can Central Illinois Homeowners Still Get?
Plenty, and the good news is they are easier to use than a tax credit because you never wait for a refund. Ameren Illinois runs an energy efficiency program with instant incentives applied at the time of install by a participating contractor. Current amounts include:
- Air source heat pumps: up to about $900
- Ductless mini split systems: up to about $630
- Heat pump water heaters: up to about $1,150
- Geothermal systems: $1,500 to $6,000 depending on configuration
Amounts and equipment requirements change, so we verify them monthly and keep the current list on our rebates and incentives page with the date each program was last checked.
What Is the Difference Between a Tax Credit and an Instant Rebate?
A tax credit reduces what you owe the IRS when you file. You pay the full price up front, wait until tax season, and only benefit if you have enough tax liability to absorb it. Retirees and lower income households often could not use the full 25C credit at all.
An instant rebate comes off the job price. Your contractor submits the paperwork, the incentive is credited, and you pay less on install day. No waiting, no filing, no liability requirement.
For most Central Illinois homeowners, the utility rebate is the more useful of the two even when both were available. Losing 25C hurts, but it is not the whole picture.
Are the Illinois Home Energy Rebates Open Yet?
Not yet. Illinois has federally funded Home Energy Rebate programs (often called HOMES and HEAR) that were approved but are not accepting homeowner applications as of this writing. When they open, they are expected to be income qualified, which means larger amounts for households under certain income thresholds.
We do not price jobs around programs that are not live. If a contractor tells you to sign today because a state rebate is coming, that is a sales tactic, not a plan. We track the program status monthly and will list it as active the day it actually opens.
Should You Delay Replacing Your Furnace or Heat Pump Now?
Usually no. Waiting on a rebate that may or may not arrive is a bad trade if your current system is failing. A furnace that quits in January costs you emergency labor, hotel nights, or frozen pipes, and none of that is offset by a $900 incentive.
Here is the honest way to decide:
- System under 12 years old and running: repair it, plan the replacement, and watch for program updates.
- System 15 years or older, or facing a repair over one third of replacement cost: replace it now and take the utility incentive you can actually get.
- Already replacing an air conditioner: look at doing both units together. We break down why in replacing your furnace and AC at the same time.
If you are weighing equipment types, how a heat pump works in Illinois winters covers where they make sense here and where they do not.
How Do You Find Out What You Actually Qualify For?
At Trouble Free Heating, Cooling & Plumbing, we tell you the incentive amount before you commit, in writing, with the program name attached. We do not quote a credit that expired to make a number look better. If a rebate applies to your equipment, it comes off the price. If nothing applies, we say so.
We serve Pekin, Peoria, Morton, Washington, and the surrounding Central Illinois communities. Free estimates are available for new installations.
To keep your home trouble-free, call (309) 347-5309 or schedule your free replacement estimate.