For homeowners in Lancaster, Columbus, and across central Ohio, maintaining a comfortable home often means facing the eventual reality of replacing an aging heating and cooling system. When that time comes, the cost can be significant, but we want to make sure you know about a major opportunity to lighten that financial load.
Recent legislative changes have reset the clock on the valuable 25C Energy Efficient Home Improvement Tax Credit, moving its expiration date up to December 31, 2025—a deadline that is approaching faster than you might realize. Now is truly an ideal moment to upgrade to a high-efficiency heat pump, secure year-round comfort, and claim this substantial credit before it vanishes.
If your HVAC system is on its last leg, don't delay your replacement decision and risk losing out on $2,000 in federal tax savings. Contact Accurate Heating, Cooling & Plumbing today by calling (740) 299-2629 or filling out our online contact form.
The Clock is Ticking: The Energy Efficient Home Improvement Credit Deadline
The federal government offers the Energy Efficient Home Improvement Credit (also known as the 25C Credit) to encourage homeowners to invest in energy-saving upgrades. For many in central Ohio, this credit was seen as a long-term incentive, stretching far into the future. However, due to recent legislative adjustments, the opportunity to claim these funds for qualifying equipment has been significantly shortened. The new, firm deadline for purchases and installations is December 31, 2025.
This accelerated timeline means that if you've been putting off replacing your furnace, AC, or outdated heat pump, the time for decisive action is now. Heating and cooling installations take time to plan and schedule, especially with the region's unpredictable weather and high demand. Waiting too long could mean missing the cutoff date and leaving thousands of dollars in tax savings on the table. We want to empower you with the facts you need to move forward confidently.
Why Heat Pumps Are Central Ohio's Smartest Upgrade Now
Central Ohio weather demands a robust and adaptable HVAC system, capable of handling cold, damp winters and hot, humid summers in Lancaster, Columbus, and beyond. Traditional systems often struggle to maintain efficiency when temperatures drop, leading to unnecessarily high utility bills. A high-efficiency heat pump, however, is designed to provide optimal comfort in both extreme heat and cold while dramatically reducing energy consumption year-round. Choosing a heat pump system is a smart investment that pays dividends through lower monthly energy expenses.
What Makes a Heat Pump Different?
A heat pump is essentially a two-way air conditioner. Instead of generating heat, it efficiently moves heat from one place to another. In the summer, it moves heat from inside your home out, cooling your living spaces. Crucially for our climate, in the winter, it pulls residual warmth from the outside air—even when it's cold—and brings it indoors to heat your home. Because it moves heat instead of creating it, a heat pump uses far less energy than a traditional furnace or boiler. If you want to explore the technology further, you can visit our dedicated heat pump services page for more information on how these systems work in our local area.
Heat pump technology has advanced significantly in recent years, making today's models incredibly reliable and effective even when temperatures drop well below freezing. They offer a single, efficient solution for your home's heating and cooling needs, contributing to both comfort and major long-term savings. When you combine this year-over-year efficiency with the immediate financial relief of the expiring tax credit, the case for upgrading becomes impossible to ignore.
Maximize Your Savings with the 25C Energy Efficient Home Improvement Tax Credit
This tax credit is designed to reward homeowners who choose equipment that helps America move toward a cleaner, more efficient energy future. The key benefit is that the credit is non-lapsing, meaning it's available every single year through the expiration date of December 31, 2025. If you claimed the credit last year for new windows, you can claim it again this year for a new heat pump installation.
The most important numbers to understand for heat pump replacement are the credit percentages and caps.
Key Financial Details of the 25C Heat Pump Credit:
- Credit Percentage: The credit is equal to 30% of the project’s total cost.
- Annual Limit for Heat Pumps: You can receive up to $2,000 specifically for the purchase and installation of a qualifying heat pump or heat pump water heater.
- Installation Costs Included: Unlike some other qualifying improvements, the costs for labor associated with installing your heat pump or heat pump water heater are included in the 30% calculation, helping you reach that $2,000 cap more easily.
- Overall Annual Limit: The $2,000 heat pump credit is separate from other 25C improvements, resulting in a maximum total yearly credit of up to $3,200 if you pursue other eligible projects, like new doors or insulation, in the same year.
It is important to remember that this is a non-refundable tax credit, which means it can lower your tax bill to zero, but you will not receive any unused credit amount as a refund. Additionally, any portion of the credit that exceeds your tax liability for the year cannot be rolled over to reduce future tax bills.
Is My Aging System Eligible for Replacement?
If you are a homeowner in central Ohio, the credit applies if you are upgrading a heating or cooling system in your existing primary residence. The home must be located in the U.S., but it does not need to be newly built. For those with older, less efficient equipment, replacing a system before it fails completely is always the most economical strategy. You avoid emergency service costs and can take advantage of planned financial incentives like this tax credit.
Ensuring Your New Heat Pump Qualifies
A primary concern for many homeowners is knowing exactly which model will qualify. The IRS does not provide a list of qualifying equipment, but instead directs that eligible heat pumps must meet or exceed the highest efficiency standards set by the Consortium for Energy Efficiency (CEE), not including any advanced tiers. This is a technical requirement that is best verified by professionals.
When you work with a trusted contractor like Accurate Heating, Cooling & Plumbing, we take the guesswork out of the process. You can rely on the equipment manufacturer’s written certification that the product qualifies. We will ensure the models we recommend meet these specific requirements so you can be confident when filing your tax return.
The rapid approach of the December 31, 2025, expiration date makes now the best time to schedule your consultation and installation.
Three compelling reasons to replace your system and claim the credit right away:
- Stop Wasting Money on Repairs: Older systems require more frequent and expensive repairs, and throwing money into them is often just delaying the inevitable replacement.
- Lock in Energy Savings Now: A new, high-efficiency heat pump will begin reducing your monthly utility bills immediately, giving you more time to enjoy lower energy costs before the credit expires.
- Use the $2,000 Credit While It Lasts: With the unexpected move of the deadline to the end of 2025, this highly valuable credit may not be available again, making every month before the deadline precious.
Choosing to upgrade today is not just about a tax credit; it’s about investing in the efficiency, comfort, and reliability of your home for years to come.
How to Claim Your Tax Credits for Home Improvements
Claiming these tax credits for home improvements is straightforward and requires only careful record keeping. It is crucial to gather all necessary documentation before the installation is complete. You do not need to itemize deductions on your federal tax return to claim this credit. Instead, you simply attach a specific form.
Here is a step-by-step guide to claiming your 25C Energy Efficient Home Improvement Tax Credit:
- Purchase and Install by the Deadline: You must have the qualifying heat pump purchased and installed in your primary residence by December 31, 2025.
- Keep Comprehensive Documentation: Hold onto your detailed invoice from Accurate Heating, Cooling & Plumbing showing the cost of the heat pump equipment and the installation labor. Also, keep the manufacturer’s certification statement, which confirms the product meets the necessary energy efficiency requirements.
- Fill Out IRS Form 5695: When you file your federal income tax return for the year the installation was completed (e.g., filing your 2025 taxes in early 2026), you will need to fill out and attach IRS Form 5695, Residential Energy Credits.
- Calculate the Credit: You will use the information from your invoice to calculate the 30% credit amount, up to the $2,000 maximum for the heat pump installation, on Form 5695.
While we are experts in HVAC installation, we are not tax advisors. We strongly recommend speaking with a qualified tax professional to ensure you meet all requirements for claiming this credit on your specific tax return. The certainty of a professional consultation can provide you with peace of mind.
Claim Your 25C Energy Efficient Home Improvement Tax Credit Before It’s Too Late
The opportunity to secure up to $2,000 off the cost of a new, highly efficient heat pump system is a significant one for homeowners across central Ohio. If your system is nearing the end of its lifespan, this approaching December 31, 2025 deadline makes the decision to upgrade immediate and essential. Don't wait until the last minute and risk delays that could cost you thousands in tax savings. Our team at Accurate Heating, Cooling & Plumbing is here to help you select and install a qualifying heat pump that will keep your home comfortable and efficient for years to come.
Reach out to us today at (740) 299-2629 or visit our online contact form to start your project and secure your credit.