Just about every homeowner shopping for a new system asks the same thing: "Isn't there a tax credit for this?" A year ago the answer was a clear yes. In 2026 it's more complicated — and a lot of the advice floating around online is out of date. So let's walk through what really applies to a Central Arkansas home right now, with a source attached to every dollar figure.
Short version: the marquee federal credits are gone for new 2026 installs, but utility programs from Entergy Arkansas and seasonal manufacturer promotions can still take real money off the total. Here's how to tell the difference between a savings program that still exists and one that quietly expired.
Read this first
This is general information, not tax advice — tax-credit rules and utility programs change; confirm current eligibility with a tax professional and with Entergy Arkansas before purchasing. We're HVAC pros, not accountants, and the biggest federal credits described here expired at the end of 2025.
The numbers at a glance
Three figures that frame 2026
| Figure | What it means | Source |
|---|---|---|
| $2,000 | former annual federal 25C credit cap for a qualifying heat pump — expired after Dec 31, 2025 | IRS / ENERGY STAR |
| ~$350 | value of the pro-installed smart thermostat Entergy offers new thermostat-program enrollees | Entergy Arkansas |
| 2-4°F | adjustment Entergy makes to enrolled thermostats on peak summer weekdays (Jun 1-Sep 30) | Entergy Arkansas |
The 2026 change
The big change: the federal HVAC tax credits expired
This is the part most homeowners haven't heard yet. The One Big Beautiful Bill Act (Public Law 119-21), signed July 4, 2025, terminated the two federal tax credits people usually mean when they ask about HVAC savings. Both were ended for property "placed in service" after December 31, 2025 (IRS). In plain terms: if your system wasn't fully installed by the end of 2025, the federal credit isn't available for it.
Section 25C — Energy Efficient Home Improvement Credit
Created in its current form by the Inflation Reduction Act, this is the credit that made HVAC upgrades attractive on paper. While it was in effect, it covered 30% of project cost with annual limits (IRS / ENERGY STAR):
- Up to $2,000 for a qualifying heat pump (its own separate annual category)
- Up to $600 for a qualifying central air conditioner
- Up to $600 for a qualifying furnace
- $1,200 aggregate annual cap for most other qualifying items
Equipment had to meet the highest efficiency tier in effect (defined against the Consortium for Energy Efficiency, or CEE, tiers), the credit was nonrefundable, and it was claimed on IRS Form 5695. All of that applied to equipment placed in service through December 31, 2025 — after that date the credit no longer applies to new installations (IRS).
Section 25D — Residential Clean Energy Credit (geothermal)
For homeowners considering a geothermal heat pump, the 25D credit was the big one: 30% of cost with no dollar cap, originally scheduled to run through 2032. The same 2025 law terminated it for expenditures made after December 31, 2025, where an expenditure is treated as made when installation is completed (IRS). So a geothermal system finished in 2026 does not qualify for the federal credit.
One exception: work you finished in 2025
If your equipment was fully installed on or before December 31, 2025, you may still claim the applicable credit on your 2025 federal return using IRS Form 5695, and any unused portion of the 25D credit can generally be carried forward (IRS). If that's you, hang onto your paperwork and talk to your tax preparer.
What still works
What still pays in 2026: Entergy Arkansas programs
With the federal credits off the table for new installs, your utility becomes the most concrete source of HVAC savings in Central Arkansas. Entergy Arkansas runs several residential efficiency programs (Entergy Arkansas). The most relevant to heating and cooling:
Smart Direct Load Control thermostat program
This demand-response program adjusts enrolled smart thermostats by 2-4°F on peak weekday afternoons between June 1 and September 30. New enrollees can receive a professionally installed smart thermostat (a Copeland Sensi Touch that Entergy describes as about a $350 value) at no additional cost, plus a small annual enrollment incentive; customers who already own a qualifying thermostat can enroll for an incentive too (Entergy Arkansas). Enrollment is voluntary and you can typically override an event if you need to. Terms and incentive amounts change season to season, so verify the current offer with Entergy Arkansas before enrolling.
Residential efficiency & instant rebates
Entergy also offers residential energy-efficiency programs — including point-of-purchase and instant rebate offers on qualifying efficient products — through its Entergy Solutions program (Entergy Arkansas). Exactly which measures and rebate amounts are available changes with each program year, so we won't quote a number that might be stale. When we scope your project we can check what's active and whether your equipment qualifies.
Important: utility programs, incentive amounts, eligibility rules, and end dates all change — sometimes mid-year. Always confirm the current terms directly with Entergy Arkansas before you count on a rebate.
The third lever
Manufacturer promotions: real, but seasonal
The third lever is the equipment maker. American Standard, like most major brands, runs seasonal promotions that can reduce the cost of a qualifying new system or pair it with special financing. These are set by the manufacturer, they rotate throughout the year, and the amounts depend on the specific equipment and package — which is exactly why you should be skeptical of any fixed dollar figure in an ad or an old blog post. As an American Standard authorized dealer that services every brand, we'll tell you what promotion is actually live at the time you buy, in writing, on your quote. We don't inflate a number to make a sale look better than it is.
The paperwork
How to actually claim what's available
Whether you're finalizing a 2025 credit or lining up 2026 utility and manufacturer savings, the mechanics are the same: document everything before you buy, and confirm eligibility rather than assume it.
- Confirm the equipment's efficiency tier before you buy — a credit or rebate only counts if the model actually qualifies.
- Keep every receipt, the itemized invoice, and the AHRI certificate for your matched system.
- For any 2025 federal credit, the form is IRS Form 5695; save the manufacturer's certification and QMID/PIN where required.
- Verify current program terms directly with Entergy Arkansas and read the enrollment agreement before you sign.
- Ask us, in writing, which manufacturer promotion applies to your exact quote.
- Talk to a tax professional about your specific situation — this article is general information, not tax advice.
How we help at Jet Heat and Air
We're a veteran-owned shop based in Bryant, serving Central Arkansas with a4.8-star rating across 347 reviews. When you're weighing a new system, we'll match you with qualifying equipment, hand you the AHRI certificate and itemized invoice you need for any rebate paperwork, tell you which American Standard promotion is actually running, and help you understand Entergy's thermostat and efficiency programs. We service all brands, offer same-day service, and answer a real 24/7 line — so a savings question never has to wait.
What we won't do is promise "guaranteed savings" or quote you a tax credit that no longer exists. If a straightforward repair beats a full replacement for your budget, that's what we'll tell you.
Frequently asked questions
Can I still get the federal HVAC tax credit in 2026?
Not for a new system installed in 2026. The federal Energy Efficient Home Improvement Credit (Section 25C) and the Residential Clean Energy Credit (Section 25D) were both terminated for property placed in service after December 31, 2025 by the One Big Beautiful Bill Act, signed July 4, 2025 (IRS). If your equipment was fully installed on or before December 31, 2025, you may still claim the credit on your 2025 return using IRS Form 5695. For a 2026 purchase, focus on Entergy Arkansas programs and manufacturer promotions instead, and confirm your situation with a tax professional.
How much was the federal heat pump credit worth before it expired?
Under the Inflation Reduction Act, Section 25C covered 30% of project cost with annual limits: up to $2,000 for a qualifying heat pump, up to $600 for a qualifying central air conditioner, and up to $600 for a qualifying furnace, with a $1,200 aggregate annual cap for most items (heat pumps had their own separate $2,000 category). Equipment had to meet the highest efficiency tier in effect, and the credit was nonrefundable (IRS / ENERGY STAR). Those amounts applied to equipment placed in service through December 31, 2025 only.
Does Entergy Arkansas offer any HVAC rebates in 2026?
Yes. Entergy Arkansas runs a Smart Direct Load Control thermostat program and residential efficiency rebate programs (Entergy Arkansas). New enrollees in the thermostat program can receive a professionally installed smart thermostat (a Copeland Sensi Touch, described by Entergy as about a $350 value) plus a small annual enrollment incentive, in exchange for letting the utility adjust the thermostat 2-4 degrees on peak summer weekdays between June 1 and September 30. Programs, incentive amounts, and availability change, so confirm current terms directly with Entergy Arkansas before you rely on them.
How do manufacturer rebates on a new system work?
Equipment makers like American Standard run seasonal promotions that can knock money off a qualifying new system or bundle in financing offers. The details change every season, the amounts depend on the specific equipment and package, and they are set by the manufacturer, not by us. Because we are an American Standard authorized dealer that services all brands, we will tell you what promotions are actually running when you get your quote rather than quote you a number from an old flyer.
Sources
- Internal Revenue Service (IRS), Energy Efficient Home Improvement Credit (Section 25C) — credit rate, annual limits for heat pumps, central AC and furnaces, aggregate cap, and the December 31, 2025 placed-in-service cutoff.
- Internal Revenue Service (IRS), Residential Clean Energy Credit (Section 25D) — 30% credit for geothermal heat pumps and its termination for expenditures after December 31, 2025.
- Internal Revenue Service (IRS), FAQs for modification of sections 25C, 25D and others under Public Law 119-21 (the One Big Beautiful Bill Act, July 4, 2025) — termination dates and carryforward treatment.
- U.S. Environmental Protection Agency, ENERGY STAR — federal tax credit eligibility and equipment efficiency (CEE tier) requirements.
- Entergy Arkansas — Smart Direct Load Control thermostat program (thermostat value, annual incentive, 2-4°F adjustment, June 1-September 30 window) and residential Entergy Solutions efficiency and rebate programs.
This is general information, not tax advice — tax-credit rules and utility programs change; confirm current eligibility with a tax professional and with Entergy Arkansas before purchasing. Figures are cited as published by their sources.