Virginia Heat Pump Tax Credit 2025
How the federal 25C credit applied to Virginia homeowners, how it differs from Dominion Energy Virginia rebates, and what expired at the end of 2025.
Is there a Virginia heat pump tax credit in 2025?
The federal 25C Energy Efficient Home Improvement Credit expired December 31, 2025. It is not available for new heat pump installations in 2026. If you installed a qualifying heat pump in 2025, you may still be able to claim it on your 2025 federal tax return. Dominion Energy Virginia rebates are a separate program and remain available regardless of the federal credit status.
Not tax advice. Always verify with a qualified tax professional and the IRS.
Dominion Energy Virginia rebate vs. federal 25C tax credit
| Factor | Dominion Energy Virginia rebate | Federal 25C credit |
|---|---|---|
| Who administers it | State agency or utility | IRS / federal government |
| What it is | A rebate reducing installation cost | A credit reducing federal income tax owed |
| When you receive it | At installation or mail-in after | When you file federal taxes |
| Current status (2026) | Active — verify current amounts | Expired Dec 31, 2025 |
| Non-refundable? | N/A — reduces your cost directly | Yes |
| Stackable? | Stackable with 25C for 2025 installs | Stackable with state rebates (basis may adjust) |
Why contractor quotes can be misleading about tax credits
Is the federal 25C heat pump tax credit still available in 2026?
No. According to the IRS, the 25C Energy Efficient Home Improvement Credit applies to qualifying property placed in service before December 31, 2025. Equipment installed in 2026 does not qualify under current law. If Congress extends or reinstates the credit, the IRS will update its guidance.
Can I still claim the 25C credit if I installed a heat pump in 2025?
If your heat pump was placed in service before December 31, 2025, you may be eligible to claim the 25C credit on your 2025 federal tax return. The credit is non-refundable and capped at $2,000 for heat pumps. Beginning in 2025, the IRS also requires a Qualified Manufacturer Identification Number (QMID). Consult a tax professional.
What heat pump incentives are still available in Virginia in 2026?
While the federal 25C credit expired December 31, 2025, Virginia homeowners can still access utility rebates through Dominion Energy Virginia (Dominion Energy Virginia, Appalachian Power (AEP), NOVEC). The Dominion Energy Virginia heat pump rebate is up to $1,500. These utility rebates are separate from federal tax credits and remain available for 2026 installations. Verify current amounts directly with Dominion Energy Virginia, Appalachian Power (AEP), NOVEC before purchasing.
Is there a Virginia-specific heat pump tax credit?
Consult a Virginia tax professional and the Virginia Department of Energy for current state income tax credit availability. Dominion Energy Virginia rebates are separate programs — they are utility or agency rebates, not tax credits.
Can I combine Virginia utility rebates with other incentives in 2026?
Yes. Virginia utility rebates from Dominion Energy Virginia can typically be combined with: any applicable state tax credits (check with a Virginia tax professional), low-interest financing programs from your utility or state energy office, and any future federal incentives Congress may enact. The federal 25C credit expired for 2026 installations, but the Dominion Energy Virginia rebate (up to $1,500) remains fully available.