For a heat pump installed in 2026 there is no federal tax credit, the federal rebate no longer pays for most gas, oil or propane swaps, and the heat pump rebates that remain come from states and utilities. Several of those offers change or end on 31 December 2026, and each has conditions that can matter more than the amount. Read this page in order: the two federal questions, the programs we’ve read, what a rebate can’t fix, then the rules that decide whether a given system counts.
The Last Furnace sells and installs nothing and takes no fees from installers or programs. Nothing here means you qualify: each program decides, and a tax professional answers tax questions.
The federal tax credit ended
The old credit paid 30% of cost, up to $2,000 a year for heat pumps. Section 25C “shall not apply with respect to any property placed in service after December 31, 2025.” The test is when the job was finished, not when you paid, so a 2025 deposit doesn’t rescue a 2026 install. A heat pump installed in 2025 can still be claimed on a 2025 return if it met the rules. New gas furnaces lost the same credit, and geothermal’s separate credit ended on the same date, so no side of the choice has one now. Our page on the heat pump tax credit in 2026 covers jobs that ran across New Year, 2025 claims, and the argument you may see that the credit runs to 2032, which the IRS hasn’t adopted.
Notice 26-2: what changed in the federal rebate
Some pages still promise a federal rebate of up to $8,000. DOE Program Notice 26-2, effective 29 May 2026, renamed that program High-Efficiency Electric Home Rebates (HEEHR, formerly HEAR) and changed what it pays for:
- Fuel switching is out. The notice removes upgrades for “fuel-switching (i.e. replacement of non-electric appliances).”
- Electric to electric stays, as does new construction.
- Insulation and air sealing come first, unless the home already meets a DOE-approved state level.
- No rebates for DIY HVAC work, and no combining with another federal grant or rebate for the same project.
- Old approvals can stand. Reservations approved under earlier guidance may still be carried out. New ones must fit the new rules.
The statute’s $8,000 for a heat pump, within $14,000 in total, is a ceiling for income-qualified households, not a sum anyone is owed. It covers up to 100% of cost below 80% of area median income and up to 50% from 80% to 150%. States decide what they actually pay.
If you keep your furnace, the answer is unsettled
The same notice also allows “dwellings to retain existing fossil-fuel HVAC systems when installing a heat pump, even if the heat pump will not become the primary source of heating and cooling.” It doesn’t reconcile that line with the fuel-switching one, and we found no later DOE guidance. A gas home adding a heat pump can’t tell from the text alone whether it qualifies. Ask your state energy office before you count on it.
Where the federal rebate stands in the states we read
| State | What its page says |
|---|---|
| North Carolina | Rebates “will no longer be allowed for the replacement of gas or any other fossil fuel appliances.” Electric-to-electric replacement is allowed |
| Georgia | Single-family reopened with limited measures, wiring and panel upgrades alongside a home efficiency project. No heat pump rebate listed |
| Maine | Heat pumps in two building types only: new affordable multifamily housing and single-family manufactured homes |
| California | First phase fully reserved as of 31 August 2026 |
| Michigan | New income-qualified applications temporarily unavailable in five EGLE districts. The page doesn’t say how the 2026 change applies |
NASEO’s list, updated 30 September 2026, also shows the program launched in Arizona, Colorado, the District of Columbia, Indiana, New Mexico, New York, Rhode Island, West Virginia and Wisconsin. Launched doesn’t mean open or funded, and we couldn’t confirm the current rules there. Massachusetts isn’t on the list.
State and utility rebates we’ve read
This isn’t a national list. Start with your electric utility and your state energy office, because other offers exist. We found almost no 2027 sheets yet.
| Program | 2026 offer | Date to watch |
|---|---|---|
| Mass Save, Massachusetts | Whole-home $2,650/ton up to $8,500; partial-home $1,125/ton up to $8,500; Basic $250/ton up to $2,500. Income-based up to $16,000, not for homes heating with natural gas | Install by 31 Dec 2026. Paperwork received by 28 Feb 2027. From 1 Jan 2027: whole-home $2,350/ton and partial-home $1,000/ton, each capped at $7,500 |
| Efficiency Maine | By income, $3,000, $2,000 or $1,000 per eligible single-zone outdoor unit, with lifetime limits of $9,000, $6,000 or $3,000. Ducted whole-home pays the limit as one amount. No home with a natural gas account | $500 bonus: job finished and claim sent by 31 Dec 2026. Not for single-wide mobile homes |
| NHSaves, New Hampshire | Eversource, Liberty and Unitil customers: $250/ton, 5-ton limit; $2,000/ton for installs from 23 March replacing electric resistance heat, with pre-verification. While funds are available | Install by 31 Dec on the form; the page also shows 30 Dec, so finish early. Postmark by 30 Jan 2027 |
| Efficiency Vermont | Up to $475 ductless, up to $2,200 ducted | Announced as 2026 rebates. No 2027 offer found |
| BGE, Maryland | Amounts vary by equipment and by the fuel replaced, so read them on BGE’s page | Participating contractor installs by 31 Dec 2026. BGE says it is “awaiting a decision” from the state regulator on 2027 |
| Clean Heat, New York | Systems must be sized to at least 100% of the heating load at design conditions. New fossil equipment is prohibited alongside an eligible heat pump. Paths depend on your utility, so ask it for amounts | Manual Version 3, effective 1 Sep 2026 |
Massachusetts: the rebate depends on what you sign
On a 3-ton system the 2026 whole-home rate pays $7,950 and the partial-home rate $3,375. The bigger figure means signing that the heat pumps are the only heat, with the old system removed or disabled, and the home weatherized before the install. Because weatherization comes first, a home that still owes insulation work should start there. Our Mass Save heat pump rebate guide works each size, the switchover limits for homes that keep a furnace, and why gas homes should run their numbers before anything else.
Maine: count outdoor units, not rooms
A multi-zone unit earns nothing, so the same three rooms can bring $0 or $6,500 at moderate income, depending on how the job is built. The heat pumps must become the main heat, and a boiler or furnace may stay for emergency backup only. Our Maine heat pump rebate guide covers the sizing worksheet, the frozen-pipe assessment, the low-income supplemental rebate and what the heat costs to run at recent Maine prices.
What a rebate can’t fix
A rebate is paid once and a heating bill comes every winter. At US average prices (18.16 cents per kWh in August 2026 and $14.77/Mcf gas in the first quarter of 2026), a heat pump needs a seasonal COP above about 3.5 to beat a 95% gas furnace. With each state’s electricity price and the regional gas price, that’s about 2.7 in Georgia and about 5.9 in Michigan. All of this is our arithmetic, and the 95% is our assumption.
So keeping or replacing a gas furnace is a sound choice in many homes. Put your own bills through the heat pump vs gas furnace calculator, or the savings calculator for oil, propane or electric heat. A negative saving means the furnace costs less to run, and no rebate changes that. How a heat pump and a furnace compare goes through the rest of the choice.
Rebate rules can also change the system you’d pick. A new furnace paired with a heat pump can lose money a heat pump alone might get: Efficiency Maine excludes the pairing and New York prohibits new fossil equipment alongside it, as our dual fuel guide explains. If a program wants the old system shut off, read what changes in the house when a furnace goes first, including the venting and frozen-pipe checks.
Efficiency and refrigerant: legal isn’t the same as eligible
The national minimum for a split heat pump is 14.3 SEER2 and 7.5 HSPF2. That’s the floor, not a rebate test. Mass Save requires ENERGY STAR Cold Climate and its own qualified list. Efficiency Maine’s list has its own criteria, including a COP of at least 1.75 at 5°F.
R-410A isn’t banned. EPA’s May 2026 rule (91 FR 31284) lets a system still be installed if its specified components were all made or imported before 1 January 2025, so a discounted one may be on offer. That doesn’t carry everywhere. New York’s own rule doesn’t pick up EPA’s change automatically, and Mass Save’s list page says new residential systems above 700 GWP, including R-410A, came off as of 1 January 2026, with later dates for a few product types. Ask which rules your installer and program apply, and see what a good heat pump installation includes for what a quote should show.
Before you sign
- Take any “federal tax credit” line off the quote, then compare the real price.
- Check with the program that your equipment, your installer and your current heating fuel all qualify.
- Get each rebate in writing: the program, the amount, who applies, who receives the money, and what happens if it’s refused.
- If a date matters, put the installation date in the contract, and leave time for any permit and inspection.
- Don’t let 31 December push you into a system you wouldn’t choose in February. A deadline is a reason to start early, not to skip a proper sizing and quote.
We’ll recheck the lines that change on 31 December in mid-December and again in January. This page is general information, not professional, tax or legal advice.
Sources checked on 4 November 2026.
