Inflation Reduction Act (IRA) Rebate & Tax Credit Estimator
Estimate 25C/25D federal tax credits and HEEHRA (HEAR) upfront electrification rebates from your household income, filing status, and planned home upgrades — then download a professional PDF report.
| Upgrade | Cost | HEEHRA Rebate | Tax Credit | Net Cost |
|---|---|---|---|---|
| Estimate to see the breakdown | ||||
Green rows receive a HEEHRA point-of-sale rebate. Rebates reduce the cost basis used for tax credits. Actual amounts depend on your state program and verified income.
The federal tax credits have ended. The One Big Beautiful Bill Act terminated the 25C and 25D credits for property placed in service after December 31, 2025. Work completed on or before that date can still be claimed; work finished in 2026 or later gets no federal credit. HEEHRA rebates are unaffected by that change, but they are state-administered and funding is limited, so availability depends on where you live.
How to use the IRA incentive estimator
Enter your household details, the AMI for your county, and what each upgrade costs. The estimator works out your rebate tier, applies every per-item and household cap, recalculates the tax credit on the reduced cost basis, and then shows how much of that credit your actual tax bill lets you use.
Set household and income
Filing status, household size, income and the 100% AMI figure for your county — that ratio sets the rebate tier.
Pick the install year
2025 or earlier keeps the 25C and 25D credits live. 2026 or later zeroes them out and leaves rebates only.
Enter each upgrade cost
Heat pump, water heater, panel, insulation, solar and the rest — each tagged with the programs it qualifies for.
Read the split and save the PDF
Rebate, credits, what your tax bill can absorb, net out-of-pocket, and a line-by-line breakdown by upgrade.
How the incentives stack — and where they stop
The order matters. Rebates come off the invoice first, which lowers the cost basis the credit is calculated on. Then the credits get capped by group. Then your actual tax liability decides how much of what is left you can really use. Adding the headline numbers together skips all three steps and overstates the benefit badly.
Worked example — a $47,500 whole-home project at 82% of AMI
Household of three, married filing jointly, $78,000 income against a $95,000 AMI → 82%, the 50% tier
Rebates: heat pump $6,000, water heater $1,500, panel $2,000, insulation $1,500, stove $750 → $11,750
Credits on the reduced basis: 25C hits both caps at $3,200, 25D on solar is $6,000 → $9,200
Total incentives $20,950, so net out-of-pocket is $26,550 — 44% of the project covered
But the tax bill on that income is only about $5,103. All $3,200 of 25C is used, just $1,903 of the 25D — and the remaining $4,097 carries forward to a future year rather than arriving this April.
Caps, tiers and limits
Every ceiling the estimator applies, and what each one does to the same project. The baseline throughout is the default: a $47,500 upgrade covering a heat pump, water heater, stove, panel, insulation, windows and solar.
| Scenario | Rebate | Tax credits | Total | Net cost |
|---|---|---|---|---|
| Under 80% AMI, 2025 install | $14,000 | $9,171 | $23,171 | $24,329 |
| 82% of AMI, 2025 install | $11,750 | $9,200 | $20,950 | $26,550 |
| 82% of AMI, 2026 install | $11,750 | $0 | $11,750 | $35,750 |
| Over 150% AMI, 2025 install | $0 | $9,200 | $9,200 | $38,300 |
Notice the top row: the 100% tier earns slightly less in credits than the 50% tier, because bigger rebates leave a smaller cost basis for the credit to work on. It still comes out ahead overall — but the two programs pull against each other, which is exactly why they cannot be added at full value.
| Upgrade | Cap | Under 80% AMI | 80–150% AMI |
|---|---|---|---|
| Heat pump (HVAC) | $8,000 | 100% of cost | 50% of cost |
| Electrical panel | $4,000 | 100% of cost | 50% of cost |
| Electric wiring | $2,500 | 100% of cost | 50% of cost |
| Heat pump water heater | $1,750 | 100% of cost | 50% of cost |
| Insulation & air sealing | $1,600 | 100% of cost | 50% of cost |
| Electric/induction stove | $840 | 100% of cost | 50% of cost |
| Heat pump clothes dryer | $840 | 100% of cost | 50% of cost |
| Household total | $14,000 | Everything above is scaled to fit inside this | |
Households over 150% of AMI receive nothing from this program regardless of the upgrade. The per-item caps bite before the household cap does, so a large heat pump and panel job can reach $14,000 on its own and leave nothing for the smaller items.
| Credit | Rate and cap | What it covers |
|---|---|---|
| 25C — heat pump group | 30%, up to $2,000 a year | Heat pumps and heat pump water heaters, sharing one cap between them. |
| 25C — envelope group | 30%, up to $1,200 a year | Insulation, windows (max $600), exterior doors (max $500) and an electrical panel (max $600), all inside the $1,200. |
| 25C — annual maximum | $3,200 combined | Both groups together. It resets each year, and unused amounts are lost rather than carried forward. |
| 25D — clean energy | 30%, no cap | Solar PV, battery storage and geothermal heat pumps. Unused credit carries forward to future tax years. |
Both credits were nonrefundable — they reduced tax owed and never generated a refund on their own. Both ended for property placed in service after 31 December 2025, so these figures apply to completed 2025 work rather than to anything planned now.
| Household income | Est. tax liability | 25C used | 25D used | Carried forward |
|---|---|---|---|---|
| $60,000 | $2,943 | $2,943 | $0 | $6,000 |
| $78,000 | $5,103 | $3,200 | $1,903 | $4,097 |
| $100,000 | $7,743 | $3,200 | $4,543 | $1,457 |
| $130,000 | $11,498 | $3,200 | $6,000 | $0 |
Married filing jointly, standard deduction, no other credits. At $60,000 the tax bill runs out before the 25C cap does — and because 25C cannot be carried forward, the $257 shortfall in that row is simply lost, while all $6,000 of the 25D survives to a later year. Order of application matters as much as the caps.
Identical house, identical invoice, and a two and a half times spread in what comes back. Income tier decides the rebate, and the calendar decides whether the credits exist at all.
- Rebates are worth more than their face value — they land on the invoice, so they cut what you have to finance. A credit of the same size arrives at filing and only if you owe tax.
- The 2026 column is the live one now — for anything not already placed in service by 31 December 2025, the rebate bar is the whole story.
- Even the best case leaves half the bill — $24,329 out of pocket on a $47,500 project at the most generous tier. These programs discount electrification; they do not fund it.
Everything the estimator works out
One set of project costs gives you the rebate tier, every cap applied in the right order, the credits recalculated on the reduced basis, and an honest view of what your tax bill can actually absorb this year.
The figures behind the incentives
*From the worked example — a $47,500 project for a household of three at 82% of AMI, installed in 2025. Every figure recomputes for the costs, income and install year you enter.
Built for anyone pricing an electrification project
The gap between the headline incentive and what a household actually receives is where most of the disappointment lives. This is for the people who need the real number before money changes hands.
Working out what a heat pump, panel upgrade and solar array really cost after the rebate lands and the credits are netted against an actual tax bill.
- Look up the real AMI for your county and size
- Check your state’s program is open and funded
- Budget from the net figure, not the headline
Showing a customer an honest after-incentive number instead of an optimistic one that falls apart when the caps and the tax liability are applied.
- Never add rebate and credit at full value
- Attach the PDF breakdown to the proposal
- Confirm equipment meets the efficiency rules
Answering the buyer who wants to know what it costs to modernise a house with an aging furnace, an undersized panel and no insulation.
- Model the buyer’s income, not the seller’s
- Panel upgrades often unlock everything else
- Point the buyer at the state energy office
7 things to know before you spend
The assumptions that turn a promising incentive estimate into a disappointing one — and the checks that catch them early.
IRA rebates and tax credits FAQ
The questions homeowners and contractors ask most when working out what an electrification project really costs.
Two different things that people often lump together. HEEHRA rebates are upfront, income-qualified discounts on electrification equipment, administered by each state with federal money. The 25C and 25D tax credits reduced what you owed the IRS at filing time and were not income-limited.
They behave very differently. A rebate lowers the invoice on the day of purchase, so it helps regardless of your tax situation. A credit only helps if you owe federal tax, and it arrives months later when you file.
Eligibility runs off your household income compared with the Area Median Income for your county and household size. Under 80% of AMI covers 100% of the cost up to each item’s cap; 80% to 150% covers 50%; above 150% of AMI, nothing.
Both the tier and the caps matter. A household at 60% of AMI does not get an unlimited free heat pump — it gets 100% of the cost up to that item’s cap, with everything capped at $14,000 per household.
Yes. The One Big Beautiful Bill Act terminated both credits for property placed in service after 31 December 2025. Equipment installed and operational on or before that date can still be claimed; work finished in 2026 gets no federal credit.
Placed in service is the test, not the contract date or the deposit. If a project straddled the deadline, the date the equipment actually became operational governs — worth confirming with a tax professional rather than assuming.
Yes, and this is the most common mistake in DIY estimates. A rebate reduces the cost basis the credit is calculated on, so you cannot claim 30% of the full sticker price after the rebate has already come off the invoice.
On a $12,000 heat pump with a $6,000 rebate, the credit is calculated on $6,000, not $12,000. Adding both incentives at full value overstates the benefit substantially.
Both credits were nonrefundable — they could only reduce tax you actually owed, and never produced a refund on their own. Any excess was not paid out.
The two behaved differently from there: unused 25D carried forward to a future tax year, while unused 25C was lost. That is why a household with a modest tax bill and a large solar project uses far less of the credit than the headline suggests.
HEEHRA is capped at $14,000 per household, with per-item caps inside that — $8,000 for a heat pump, $4,000 for an electrical panel, $2,500 for wiring, $1,750 for a heat pump water heater, $1,600 for insulation and air sealing, and $840 each for an electric stove or heat pump dryer.
On the credit side, 25C was capped at $3,200 a year: up to $2,000 for the heat pump group and $1,200 for the envelope and panel group. 25D had no cap — a flat 30% of qualifying solar, battery and geothermal costs.
It depends entirely on where you live. The federal money is allocated to states, and each state energy office designs, launches and administers its own program on its own timeline. Some have been running for a while, some are still standing up, and some have fully reserved their funds.
Because the funding is finite and first-come, treat any estimate as an upper bound rather than an entitlement, and check your state energy office before signing a contract that depends on it.
Often yes — utility rebates, state incentives and local programs frequently stack with federal ones, and stacking can push the covered share of a project well past what this estimator shows on its own.
The rules vary by program, and some prohibit stacking with specific federal incentives or reduce their own amount when another applies. Your installer and your utility usually know the local landscape better than any national summary.
Estimation Only — Not Tax, Legal or Financial Advice: This estimator applies published program caps to figures you enter and produces an approximation, not a determination. The tax liability shown is a simplified calculation from gross income and the standard deduction; it ignores other income, deductions, credits, the alternative minimum tax, state tax and everything else on a real return, so the amount of credit you can actually use will differ. HEEHRA rebate eligibility, income verification, AMI limits, qualifying equipment, approved contractors, program design and remaining funding are all determined by your state energy office and vary widely — an estimate here is not an approval, a reservation or a guarantee that funds remain available. The 25C and 25D credits were terminated for property placed in service after 31 December 2025 by the One Big Beautiful Bill Act; figures shown for them apply only to work completed on or before that date, and eligibility rules for equipment efficiency and documentation still apply. For planning purposes only; confirm rebate availability with your state energy office and confirm any tax treatment with a qualified tax professional before making a decision.