The Big Beautiful Bill and HVAC: Changes to Tax Credits Coming

The “Big Beautiful Bill” has been getting a lot of headlines recently, for good reason. It’s a large bill passed by Congress and signed by President Trump that affects a host of industries in different ways.

The bill as a whole contains too much for us to talk about as an HVAC company, since it’s well outside our expertise. However, the bill’s provisions touch on heating and cooling for residential properties, and this does fall within our expertise.

This information on the bill’s effect on HVAC has been ignored by a lot of homeowners because it’s not been reported on much. But it can be important to your decisions as a homeowner in regard to new HVAC equipment. Below, we talk about what the bill means, and how it may affect homeowners.

Changes to Residential HVAC in the Big Beautiful Bill

The changes, unfortunately, will reduce credits available for energy-efficient heating and cooling equipment, and other energy-efficient home upgrades.

Sections 25C and 25D of the current tax code are being repealed by the bill. These sections, respectively, provided an energy efficiency home improvement credit for residential equipment, and a federal tax credit for geothermal heat pumps.

Geothermal is relatively rare as a residential equipment type, but the energy efficiency credits apply to a broader range of equipment and are worth up to $3,200 every year for home upgrades. Up to $2,500 of that could go toward energy-efficient HVAC upgrades.

25C credits were popular with homeowners, and CABS Heating and Air Conditioning has helped many homeowners to receive their credits for energy-efficient upgrades.

The credits could also go toward improvements such as exterior home doors, windows, skylights, EV charging equipment, electric vehicles, and boilers.

While this may come as a blow to some, the repeals will not take effect until next year. Any projects that start on or before Dec. 31, 2025 can still qualify for these credits.

Taking Action Before Credits Expire

So the clock is ticking on energy-efficient tax credits. We’re not here to tell you that you definitely need a new heating and cooling system. We’re not in the business of high-pressure tactics. The correct decision for your home is one only you can decide, based on a range of factors.

However, if you’re considering upgrades to your air conditioner, furnace, heat pump, or other major household appliances or structures (windows, doors), understanding the deadline on these credits is important. 

After this year, they’ll be gone, and while energy-efficient equipment can still save you money over the long haul, it’s a lot easier to afford initially with credits that can be worth thousands of dollars!

CABS offers free, no-obligation quotes, and we can help you to make sure you’re getting all applicable deals, discounts, tax credits and other incentives for your HVAC equipment. Making sure you’re confident in your decision is how we earn your business, so we’re here to help in answering all of your home comfort questions.