Federal Tax Credits for HVAC
Up to $2,000 for Arizona Homeowners
The Inflation Reduction Act (IRA) provides significant federal tax credits for qualifying HVAC upgrades. Bradford installs Trane systems that qualify — and can help you understand what you're eligible for before you buy.
Tax advice disclaimer: Bradford is an HVAC contractor, not a tax professional. The information below is for general guidance only. Always consult a qualified tax professional or CPA before claiming credits on your return. Tax law changes frequently — verify current requirements at IRS.gov.
2026 HVAC Tax Credits at a Glance
These credits apply to systems installed in your primary residence. The annual cap for all 25C credits combined is $3,200.
Heat Pump Installation
Requirement: SEER2 ≥ 15.2 (split system)
Trane XL18, XV20 qualify
Central Air Conditioner
Requirement: SEER2 ≥ 16 (South/Southwest zone)
Trane XR17, XL18, XV20 qualify
Gas Furnace
Requirement: AFUE ≥ 97%
Ask Bradford about qualifying models
Air Source Heat Pump (Ductless)
Requirement: SEER2 ≥ 15.2, HSPF2 ≥ 7.8
Bradford installs qualifying mini-splits
Stack Your Savings — APS & SRP Rebates
In addition to federal tax credits, utility programs may offer current savings opportunities for qualifying equipment. Review the provider's current terms before relying on an offer.
APS Rebates
- Review current APS residential savings options
- Check APS Marketplace for eligible equipment offers
- Confirm current equipment and installation requirements with APS
SRP Rebates
- $100–$400 for qualifying heat pumps
- $50–$200 for qualifying central AC
- Must be ENERGY STAR certified
Example: Trane XL18 Heat Pump in Surprise, AZ
Installed price ~$16,051 · Federal credit $2,000 · APS rebate ~$200 · Net cost: ~$13,851
Tax Credit FAQ
What is the federal tax credit for a new heat pump in Arizona?
Under the Inflation Reduction Act (IRA), Arizona homeowners can claim a federal tax credit of up to $2,000 (30% of the cost) for installing a qualifying heat pump. The credit applies to the equipment and installation cost. To qualify, the heat pump must meet efficiency standards (SEER2 ≥ 15.2 for split systems). Bradford installs Trane heat pumps that qualify for the full credit.
What is the federal tax credit for a new central AC in Arizona?
The Energy Efficient Home Improvement Credit (25C) provides up to $600 (30% of cost) for a qualifying central air conditioner. To qualify, the AC must meet ENERGY STAR Most Efficient criteria (SEER2 ≥ 16 for split systems in the South/Southwest climate zone). Bradford's Trane XR17, XL18, and XV20 systems qualify.
Can I claim both the heat pump credit and the AC credit?
No — you can only claim one credit per system. If you install a heat pump, you claim the $2,000 heat pump credit. If you install a traditional AC + furnace, you may claim the $600 AC credit and a separate $600 furnace credit (if the furnace qualifies). The total annual cap for the 25C credit is $3,200.
How do I claim the HVAC tax credit on my taxes?
You claim the credit on IRS Form 5695 when filing your federal taxes. Bradford provides a receipt showing the equipment model number and installation date. You'll need to verify the equipment meets efficiency requirements — Bradford can confirm which systems qualify at the time of installation.
Does Arizona have any additional state rebates for HVAC?
Arizona does not currently have a state income tax credit for HVAC. APS and SRP may offer utility savings, marketplace offers, or rebates for qualifying equipment. Review each utility's current official information because eligibility and offer amounts can change. Bradford can help identify the equipment information you may need for a utility application.
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