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Money, Code & Permits

What is Federal 25C Tax Credit (Ended)?

The federal 25C Energy Efficient Home Improvement Credit was a tax credit covering 30% of the cost of qualifying heat pumps, air conditioners, furnaces, and heat pump water heaters, up to annual caps. Federal legislation signed in July 2025 terminated it, and it does not apply to equipment placed in service after December 31, 2025.

Why it matters to you

If your system was installed in 2026, older articles and sales pitches promising a federal tax credit no longer apply to you. Charleston-area savings now come mainly from Dominion Energy South Carolina, Berkeley Electric Cooperative, and Santee Cooper programs, rotating Daikin rebates, and South Carolina's pending HOMES and HEAR rebates.

Practical guidance

If qualifying equipment was installed on or before December 31, 2025, you can still claim the credit on your 2025 federal return using IRS Form 5695 — confirm the details with a tax professional. For 2026 installations, look to utility, state, and manufacturer programs instead.

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