The Clock’s Ticking on Federal Heat Pump Tax Credits in Massachusetts

If you’re a Massachusetts homeowner considering a heat pump or heat pump water heater, you’ve probably heard about the generous rebates and federal tax incentives that make switching more affordable than ever. But here’s something you might not have heard: the 25C federal tax credit—worth up to $2,000 and originally slated to be available until 2032—will now be disappearing as of January 1, 2026.


It’s all because of a sweeping federal package that was recently signed into law, informally dubbed the “One Big Beautiful Bill.” This new bill eliminates the 25C credit and will eliminate this incentive for Massachusetts homeowners looking to save while converting to cleaner energy heating and cooling systems.

What’s the 25C Tax Credit, and Why Should You Care?

Right now, thanks to the Inflation Reduction Act, the federal government offers a 30% tax credit—up to $2,000—for qualified heat pump systems and heat pump water heaters. If you live in Massachusetts, that stacks on top of Mass Save incentives, which can already save thousands from your installation cost. For some customers, we’re talking over $10,000 in total savings.


The 25C credit is available annually (meaning you can use it for a heat pump system in one year and a heat pump water heater in the next), but the key requirement is that your system must be installed by the end of the calendar year to claim the credit on your taxes.

So What’s the Deal With the “One Big Beautiful Bill”?

On July 4th President Donald Trump signed this massive piece of legislation—what they’re calling a “One Big Beautiful Bill”—that overhauls federal spending and simplify tax credits. One major piece of this legislation that is now law is that the 25C tax credit would end of December 31st, 2025. This isn’t a scare tactic—it’s a heads-up that you have less than six months to install either a heat pump system or a heat pump water heater and receive this tax credit up to $2,000.

Why Waiting Could Cost You

In Massachusetts, planning a heat pump upgrade takes time. Especially if you are looking to take advantage of the Mass Save HEAT Loan or Mass Save Whole Home Rebate, you’ll need a Mass Save Home Energy Assessment, permit approvals, not to mention contractor availability (there is VERY likely to be an end of year rush!). That process alone can take weeks, especially during the busy fall season when everyone rushes to get work done before winter.


If you wait until November or December to get started, it may be too late. Installers across the state—Endless Energy included—are already seeing our calendars fill up with an unusually hot summer and fall is likely to stay very busy with customers trying to beat the 2025 25C tax credit deadline. We’ll also mention that the Mass Save Whole Home Rebate cap is slated to go down from $10,000 to $9,000 as of January 2026!

What Should You Do Now?

If you’ve been thinking about installing a heat pump, the best thing you can do is get the ball rolling and start your process. Endless Energy can help you every step of the way—from your initial Mass Save assessment to the final system installation that locks in your tax credit eligibility and even giving you an upfront Mass Save rebate if eligible.

The bottom line? You’ve got six months left to take advantage of the biggest stack of heat pump savings we’ve seen in years – and may ever see.

Talk to Us Before Time Runs Out

We’re here to make this process simple. Whether you’re just exploring your options or you’re ready to move forward with a heat pump installation, Endless Energy is your go-to heat pump contractor in Massachusetts. We’ve been installing cold climate heat pump since 2013! From Worcester to Waltham, Marlborough to Milton, we’ve helped thousands of homeowners cut their energy bills and increase their home comfort—while cashing in on rebates before they expire.


So please don’t wait until December – let’s get your system installed before the deadline hits!


Ready to claim your tax credit before it’s gone? Book your free heat pump assessment or call Endless Energy at (508) 219-8250 today.