The short answer
There is no federal Energy Efficient Home Improvement Credit for a central air conditioner placed in service in 2026. Public Law 119-21 accelerated the Section 25C termination: IRS guidance says the credit is not allowed for property placed in service after December 31, 2025. Qualifying systems completed in 2025 may still be claimed on a 2025 return, subject to the former rules.
A central air conditioner installed and placed in service in 2026 does not qualify for the former federal Section 25C Energy Efficient Home Improvement Credit. IRS guidance on Public Law 119-21 says the credit is not allowed for property placed in service after December 31, 2025.
This reverses older articles that still describe a 30% credit capped at $600 for central AC. Those rules remain relevant only to qualifying property placed in service by the end of 2025 and claimed on the appropriate return.
2025 versus 2026
| Installation status | Federal Section 25C result |
|---|---|
| Qualifying central AC placed in service by Dec. 31, 2025 | May qualify under the 2025 rules |
| Contract signed or deposit paid in 2025, installation completed in 2026 | Does not qualify based on the IRS placed-in-service cutoff |
| Central AC placed in service during 2026 | No Section 25C credit |
| State, utility, or manufacturer rebate | Separate program; check its current rules |
The completion or placed-in-service date matters more than when you requested the quote.
What the old $600 rule covered
For qualifying 2025 property, the former credit was generally 30% of eligible cost subject to a $600 per-item limit for central air conditioning and the applicable annual overall limit. IRS examples show that 30% of a $5,000 qualifying central AC would be $1,500 before the $600 item cap reduced the available credit.
Eligibility also depended on the applicable efficiency rules, qualified manufacturer requirements, home use, tax liability, and documentation. This article does not determine an individual 2025 claim; use the 2025 Form 5695 instructions or a qualified tax professional.
What to do if your system was installed in 2025
Keep or recover:
- Final invoice and proof of payment.
- Placed-in-service or completed-installation date.
- Indoor and outdoor model and serial numbers.
- AHRI certificate for the exact match.
- Manufacturer qualification documentation and QMID where required.
- Permit or inspection record.
- 2025 Form 5695 instructions.
The 2025 credit was nonrefundable and subject to tax-liability and annual-limit rules. Do not use a 2026 equipment catalog to prove that a different 2025 combination qualified.
Incentives that can still exist in 2026
The federal 25C expiration does not automatically end:
- electric-utility rebates;
- state energy-office programs;
- municipal incentives;
- demand-response enrollment incentives;
- manufacturer rebates;
- income-qualified weatherization or home-upgrade programs.
These programs can change by service address, funding cycle, equipment match, and participating contractor. Some require preapproval before installation.
Use the ENERGY STAR Rebate Finder, your utility, and state energy office. Verify the exact AHRI combination and submit required reservations before signing when the program requires it.
Beware stale 2026 sales claims
If a proposal says “eligible for a $600 federal credit” for a 2026 installation, ask the contractor to show the current IRS authority. A manufacturer certificate created for 2025 does not extend the law into 2026.
Correct the net-price comparison before evaluating the efficiency upgrade. Do not spend thousands more to capture a credit that no longer exists.
Efficiency still has value without the credit
Compare the base and upgraded system using:
- exact installed price difference;
- AHRI-certified SEER2 and EER2;
- local cooling hours and electricity rate;
- sound and humidity benefits;
- control and repair complexity;
- utility or state rebates;
- expected ownership period.
Read our SEER2 guide and installed-cost breakdown. A correctly sized, well-installed mid-tier system can be better value than an incentive-branded premium system.
Buyer verdict
For 2026 installations, budget without the federal 25C central AC credit. Search current local incentives before contracting, and treat any federal-credit claim as stale unless the installation was placed in service by December 31, 2025.
Frequently Asked Questions
Is there a $600 federal AC credit in 2026?
No. IRS guidance says Section 25C is not allowed for property placed in service after December 31, 2025.
Does paying for the AC in 2025 preserve the credit if it was installed in 2026?
No. The IRS termination guidance uses the placed-in-service cutoff. A 2026 completion does not qualify merely because payment or contracting occurred in 2025.
Can I still claim a qualifying AC installed in 2025?
Potentially, on the appropriate 2025 federal return, if all former eligibility and documentation requirements are met. Use current 2025 filing instructions or professional advice.
Are utility AC rebates available in 2026?
They may be. Utility, state, and manufacturer programs are separate from Section 25C and vary by location, equipment, timing, and funding.
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