No. The federal Residential Clean Energy Credit (Section 25D), which paid 30% of the cost of a geothermal heat pump, ended for expenditures made after December 31, 2025. A geothermal system finished in 2026 gets no federal credit.
So the only question left is timing: when was the installation completed? Here's what the IRS says, checked on October 9, 2026.
Did the Federal Geothermal Tax Credit End?
Yes. IRS Fact Sheet FS-2025-05 says the 25D credit will not be allowed for any expenditures made after December 31, 2025. The IRS page for the ended 25D credit says it equaled 30% of the cost of qualified clean energy property installed from 2022 through December 31, 2025, including geothermal heat pumps.
The same law ended the 25C home improvement credit after December 31, 2025, so 2026 geothermal and heat pump projects have no federal credit of either kind. The guide to the federal home energy credits that ended lists every end date.
What If I Paid in 2025 but Installation Finished in 2026?
It doesn't qualify. IRS FAQ 7 says an expenditure is treated as made when the original installation of the item is completed, so a system paid for in 2025 but finished in 2026 counts as a 2026 expenditure, after the 25D credit ended.
For new construction, the IRS says the expenditure is made when your original use of the home begins. So a geothermal system in a home you first moved into in 2026 doesn't qualify either.
Can I Claim the Ended 25D Credit for a 2025 Installation?
Yes, if installation was completed by December 31, 2025. The IRS says to file Form 5695 with the 2025 return for work completed by December 31, 2025, claiming it for the tax year the property was installed, not merely purchased. Geothermal heat pumps had to meet ENERGY STAR requirements in effect at the time of purchase.
The IRS page for the 25D credit, which ended after December 31, 2025, also says it's nonrefundable but any unused amount can be carried forward to reduce tax in future years. A tax professional can confirm how a carryforward applies to your return.
What Can Geothermal Buyers Get in 2026?
Not a federal credit. In 2026, any help with a geothermal heat pump has to come from state, utility or local programs, which vary by address. We found no verified California geothermal-specific rebate in the official program pages we checked, so check your address.
The free rebate calculator shows the programs we've verified for a specific home. The heat pump efficiency ratings guide explains the ratings utilities use for air-source heat pump rebates.
Official Sources
Every fact on this page comes from the IRS, checked on October 9, 2026.
- IRS FS-2025-05, the IRS table showing when each credit ended, and FAQ 7 on installation timing
- IRS: Residential Clean Energy Credit, what the ended 25D credit covered and how 2025 claims work
Frequently Asked Questions
Is there a 2026 federal tax credit for a geothermal heat pump?
No. The 25D Residential Clean Energy Credit, which covered geothermal heat pumps at 30%, ended for expenditures made after December 31, 2025, according to IRS Fact Sheet FS-2025-05. A geothermal system installed in 2026 gets no federal tax credit.
Did the solar tax credit also end?
Yes. Solar electric panels, solar water heaters and battery storage were covered by the same 25D credit, which ended for expenditures made after December 31, 2025 (IRS FS-2025-05). Solar systems completed during 2025 can still be claimed on the 2025 return.
Can I carry forward an unused 25D credit from before it ended?
The IRS page for the 25D credit, which ended after December 31, 2025, says it's nonrefundable, but you can carry forward any excess unused credit and apply it to reduce the tax you owe in future years. That applies to qualifying property installed by December 31, 2025, before the credit ended.
Planning a heat pump in 2026? See the verified programs for your address with the free rebate calculator.