The Energy Efficient Home Improvement Tax Credit (25C credit) is set to expire at the end of 2025, so now is the time for contractors to encourage homeowners considering a heat pump, a heat pump water heater or a furnace to complete their purchase and installation.
WHAT IS THE 25C TAX CREDIT?
The Energy Efficient Home Improvement Tax Credit — known as the 25C credit — allows homeowners to claim up to 30% of the product and installation cost for upgrades to their homes on their federal income taxes. For heat pump equipment, the maximum annual credit is $2,000. Congress set an expiration date of Dec. 31, 2025, for the current tax credit when it passed the One Big Beautiful Bill Act in July.
Homeowners will not be able to claim this credit on their taxes for upgrades made in 2026, so they need to act soon to take advantage of these savings.
CREATING URGENCY: A POWERFUL SALES TOOL
The expiration of the 25C tax credit on Dec. 31, 2025, is not just a deadline. It’s a compelling reason for customers to act now. Here’s how to frame the conversation:
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Educate on Every Call: Mention the expiring tax credit during service calls, maintenance visits and new installation consultations. Many homeowners are unaware of this deadline.
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Quantify the Savings: Do the math for homeowners. For example, a 30% credit for a $7,000 heat pump installation equals $2,100, which would be capped at the $2,000 maximum. That $2,000 rebate is a significant, tangible amount of savings the homeowner will lose if they wait until 2026.
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Highlight the Installation Window: Remind customers that as the deadline approaches, installation schedules will fill up quickly. To guarantee their project is completed before the end of 2025, they should commit sooner rather than later.
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Use the Tax Credit in Your Marketing: Feature the “25C Countdown” on your website, in customer emails and on your social media channels. Create a sense of urgency, and position your business as the expert guide.
WHICH GE APPLIANCES PRODUCTS QUALIFY FOR THE 25C TAX CREDIT?
Our Tax Credits & Rebates page makes it easy for distributors, contractors and homeowners alike to see which tax credits are available for GE Profile, GE, Haier, and Hotpoint branded equipment. Users can search by product or ZIP code to learn about available federal, state and local credits and rebates, find links to required tax forms and obtain the qualified manufacturer code required to file on 2025 tax returns.
The following GE Appliances Air & Water Solutions products qualify for the 25C tax credit.
Explore the tax credits and rebates page to see the full offering of over 300 qualifying products.
UPGRADE TO SAVE NOW AND IN THE FUTURE
Purchasing any qualifying high-efficiency product before the end of the year is one of the smartest decisions a homeowner can make, but the GE ProfileTM GEOSPRINGTM Heat Pump Water Heater with FlexCAPACITY is a game-changer when it comes to long-term savings. As the most advanced water heater available, it is 4.7 times* more energy efficient than a standard electric model, which can lead to homeowners saving up to $550 annually on their utility bills**.
It solves the capacity problem, too. The innovative FlexCAPACITY feature allows the 50-gallon tank to act like an 80-gallon tank, providing 60% more hot water when needed***. When you combine these long-term performance benefits with GEOSPRING’S eligibility for the full $2,000 federal tax credit, it creates an unmatched value proposition. The combination is a powerful one-two punch of immediate savings and future-proof performance that your customers need to hear about before the Dec. 31 deadline.
The same logic applies to a central heat pump system. A new, high-efficiency heat pump provides superior heating and cooling while dramatically reducing energy consumption. Many of our GE Profile, GE, Haier, and Hotpoint branded systems qualify for the tax credit, giving installers a wide range of solutions for every customer’s needs and budget. This includes our most advanced Connect Series heat pumps, our high-efficiency SEER2 heat pumps and our robust Altitude Series, Endure Series and Caliber Series models.
And don’t forget high-efficiency gas furnaces. A qualifying 98% AFUE Modulating Upflow/Horizontal Flow Gas Furnace is also eligible for a 25C credit of up to $600, making this an excellent time to upgrade a customer’s heating system.
BEYOND 2025: THE CONVERSATION DOESN’T END
While the 25C credit is a fantastic tool through the end of 2025, the savings story doesn’t end with it. It’s crucial to let customers know that efficiency is a permanent benefit and that state and local incentives remain available.
When discussing long-term home HVAC and hot water heater replacement plans, be sure to:
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Focus on Long-Term Energy Savings: The primary benefit of a heat pump is the year-over-year reduction in utility bills. The tax credit is a bonus, but the real prize is the lifelong savings.
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Be Sure To Be the Local Rebate Expert: Many states, municipalities and utility companies offer their own rebates and incentives for high-efficiency equipment. These programs are separate from the federal credit and will continue beyond 2025. Dealers, distributors and installers can become the go-to experts by using the GE Appliances Tax Credits & Rebates page to instantly find local and state-level rebates and credits for every qualifying product.
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Sell Comfort and Performance: Modern heat pumps offer incredible comfort, with variable-speed technology that provides more consistent temperatures and better humidity control than older systems.
TIME IS OF THE ESSENCE FOR SIGNIFICANT SAVINGS
For homeowners weighing when to install a new heat pump, remind them the clock is ticking on a major tax rebate. Visit the Tax Credits & Rebates page to understand what’s available in your area.
* Source: AHRI directory of 10/23/24
** Based on GE Standard Electric GE50S10BAM vs. GE PROFILE PH50S10BPY
*** vs. comparable water heaters without mixing valve at 120°F set and 58°F inlet water temperature