Lawmakers move to end HVAC tax credit

House Republicans on Monday unveiled their long-awaited tax bill, which proposes eliminating a popular, consumer-facing HVAC tax credit. The legislation is part of President Trump’s aim to execute his tax agenda through one “big, beautiful bill.”

The big picture: The credit, known as ‘Section 25C,’ allows consumers to claim up to $3,200 a year on their tax returns for installing certain air conditioners, heat pumps, and furnaces through 2032. 

• Of the 2.3 million tax returns claiming the credit during the 2023 tax season, totaling over $2 billion, 32 percent were for air conditioners and heat pumps.

What’s happening: The bill would end consumers’ ability to claim the credit for installs beginning January 1, 2026, and also terminate Section 25D, which provides a 30 percent credit for installing geothermal heat pumps, on the same date. 

What they’re saying: “HARDI was disappointed to see that Ways and Means Republicans chose to eliminate Sections 25C [and] 25D. These tax credits have had bipartisan support for many years,” Alex Ayers, HARDI’s VP of Government Affairs, tells Homepros in an email. 

• “[W]e were hoping there was enough support for some of [the] energy tax credits to make it through, but the size of the tax cuts included in the reconciliation bill meant they [needed] as many pay-fors as possible,” he adds.
• Industry groups, including HARDI, ACCA, and AHRI, have long supported preserving the credit, as Homepros has previously reported. 

What’s next: While there’s “a lot that could change before we get to a final budget, let alone have a text head to the Senate,” as Heatmap News writes, the House aims to vote on the bill next week — and pass it by Memorial Day.