For central air conditioners installed in 2025, the federal Energy Efficient Home Improvement Credit required a SEER2 rating of at least 17.0 for split systems and 16.0 for packaged systems, along with matching EER2 minimums. Air source heat pumps used a different standard entirely: instead of a single SEER2 number, the unit had to appear on the ENERGY STAR Most Efficient list or carry the ENERGY STAR Cold Climate designation. The credit under 26 U.S.C. § 25C expired for any property placed in service after December 31, 2025,1Office of the Law Revision Counsel. 26 USC 25C – Energy Efficient Home Improvement Credit so these thresholds apply only to equipment installed during 2023, 2024, or 2025 and claimed on the return for the year of installation.
SEER2 and EER2 Minimums for Central Air Conditioners
The IRS did not set the efficiency numbers directly. It adopted the highest tier published by the Consortium for Energy Efficiency (CEE) as of January 1 of the installation year, and an ENERGY STAR label alone was not enough.2ENERGY STAR. Air Source Heat Pumps Tax Credit Because the CEE updated its tiers over the credit’s run, the qualifying numbers shifted.
For equipment placed in service on or after January 1, 2025:
- Split systems: SEER2 of at least 17.0 and EER2 of at least 12.0
- Packaged systems: SEER2 of at least 16.0 and EER2 of at least 11.53ENERGY STAR. Central Air Conditioners Tax Credit
For units installed during 2023 or 2024, the thresholds were slightly lower. Split systems needed a SEER2 of 16.0 and EER2 of 12.0. Packaged systems needed a SEER2 of 15.2 and EER2 of 11.5.
The split-versus-packaged distinction changes which number applies to you. A split system has separate indoor and outdoor units connected by refrigerant lines. A packaged system houses the compressor, coil, and air handler in one outdoor cabinet. Your installation invoice or the equipment’s AHRI certificate will say which configuration you have, and it will list the certified SEER2 and EER2 figures for that specific matched system.
A qualifying central air conditioner earned a credit of 30% of the project cost, capped at $600 per year.3ENERGY STAR. Central Air Conditioners Tax Credit The 30% could be applied to both equipment and labor.4Internal Revenue Service. Energy Efficient Home Improvement Credit – Labor Costs
Heat Pumps: Why There Isn’t a Single SEER2 Number
Starting January 1, 2025, air source heat pumps qualified through the ENERGY STAR Most Efficient program rather than a published SEER2 floor. Two pathways were available:
- Heating-dominated installations, where the unit had to carry the ENERGY STAR Cold Climate designation.
- Cooling-dominated and dual-fuel installations, such as a heat pump paired with a gas furnace.2ENERGY STAR. Air Source Heat Pumps Tax Credit
The old regional requirement was eliminated, so you could use either pathway regardless of the climate zone you live in. The practical effect: for a heat pump, do not try to match a SEER2 or HSPF2 number from memory. Confirm the specific model appears on the ENERGY STAR list for one of the two pathways.
The credit for a qualifying heat pump was 30% of the total cost, capped at $2,000 per year.5Internal Revenue Service. Energy Efficient Home Improvement Credit This $2,000 sits in a separate bucket from the $600 central AC cap, so a homeowner who installed both types of equipment in the same year could claim both.
How to Confirm Your Specific Model Qualifies
Two tools give a definitive answer for equipment installed during the credit years. The Department of Energy maintains a product lookup at regulations.doe.gov where you enter a model number and installation year to see whether it qualifies.6Appliance and Equipment Standards Program. Tax Credit Product Lookup Tool The tool remains available for verifying past installations. Alongside that, ask your contractor or the manufacturer for the Manufacturer’s Certification Statement, a signed declaration confirming the product qualifies. Many manufacturers post these on their websites keyed to model number.7ENERGY STAR. Tax Credit Definitions
You do not send the certification statement to the IRS. Keep it with your installation invoice, which should show the placed-in-service date, the model number, and an itemized split between equipment and labor. Hold on to both for at least three years after filing.8Internal Revenue Service. Topic No. 305, Recordkeeping
The Rating Alone Isn’t the Whole Test
A qualifying SEER2 number gets the equipment across one threshold. A few other conditions have to be true for the credit to actually reach your return.
The home must be an existing structure located in the United States that you use as a residence. New construction does not qualify, and a landlord who does not live in the property cannot claim the credit for equipment installed there.9Internal Revenue Service. Energy Efficient Home Improvement Credit – Qualifying Residence
Any rebate or utility incentive you received reduces the cost figure you multiply by 30%. The credit is based on what you actually paid out of pocket, not the sticker price.
The credit is nonrefundable. It can zero out your federal income tax but cannot go below zero, and unused credit does not carry to future years. The IRS states you “can’t apply any excess credit to future tax years.”5Internal Revenue Service. Energy Efficient Home Improvement Credit A homeowner whose 2025 tax liability was only $400 would recover $400 of a $600 central AC credit and lose the rest.
Claiming the Credit on a 2025 Return
The credit is calculated on Form 5695, Residential Energy Credits, Part II.10Internal Revenue Service. Instructions for Form 5695 The result flows to Schedule 3 (Form 1040), line 5b, and then to Form 1040, line 20.11Internal Revenue Service. Schedule 3 (Form 1040) – Additional Credits and Payments If you installed qualifying equipment in 2025 but already filed without claiming the credit, you have three years from the original filing deadline to submit Form 1040-X. Because the statute cut off new installations at December 31, 2025, this is the last filing window most homeowners will have to claim it.