Answers
Is the federal heat pump tax credit still available?
§25C and §25D terminated for property placed in service after December 31, 2025 under P.L. 119-21.
The short answer
No. The One Big Beautiful Bill Act (P.L. 119-21) terminated the §25C Energy Efficient Home Improvement Credit and the §25D Residential Clean Energy Credit for property placed in service after December 31, 2025. If your heat pump goes in during 2026, there is no federal credit for it, no matter what a competitor’s page still says.
The placed-in-service date is what controls
People assume payment date decides it. It does not: the statute keys the credit to when the property is placed in service. Signing a contract or paying a deposit in 2025 does not preserve a credit for equipment that is commissioned in 2026. IRS Fact Sheet FS-2025-05 is the plain-language reference, and irs.gov is the place to confirm it rather than any contractor’s blog.
Why you are still seeing “$2,000 federal tax credit” locally
Because those pages have not been updated. Several Whatcom County HVAC sites still advertise the 25C heat pump credit and list which equipment qualifies for it. That changes your budget by up to two thousand dollars, and a bid built on a dead credit will disappoint you at tax time.
There is also no Washington sales-tax exemption on heat pumps
A claim circulates that Washington exempts heat pumps from sales tax, roughly ten percent off. We looked for the statute and the Department of Revenue guidance that would have to exist for that to be true, and found neither. Budget for sales tax on your equipment and labor as normal, and ask anyone who tells you otherwise for the RCW cite.
What money is actually still on the table
Plenty, but it is local rather than federal. The PSE electric-resistance conversion rebate is $1,500, or $2,400 with Efficiency Boost. PSE pays $1,000 to $1,100 on a qualifying heat pump water heater and $300 to $600 as a midstream equipment discount through the distributor. The Community Energy Challenge offers up to $2,000 toward ductless for moderate-income households in homes built before 1990.
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