If your AC unit or furnace is getting older, you've probably been putting off an entire replacement for a while now.
Maybe you heard the federal tax credit could knock $2,000 off a new heat pump. Then you heard it went away.
So now you're stuck wondering if you missed your window. That worry is real, and you're not alone in feeling it.
Here in Southern Maryland, summers turn humid and winters bite hard. An aging HVAC system always picks the worst moment to quit.
The good news is simple. The federal credit is gone, but Maryland rebates are still very much alive.
In this article, we'll walk through what changed, which rebates still pay in 2026, and how to claim them.
What Happened To The Federal HVAC Tax Credit
Let's clear up the confusion first.
The federal 25C Energy Efficient Home Improvement Credit expired on December 31, 2025. Congress set that end date in the 2025 budget law.
That credit offered up to $2,000 back on a qualifying heat pump. It covered up to 30% of the project cost.
Here's the catch. If your system was installed and running by December 31, 2025, you can still claim it on your 2025 taxes.
But a brand-new install in 2026 does not qualify. According to Rewiring America, that door has closed.
Many competitor websites still list the old credit. Their information is now wrong, and that mistake costs homeowners real money.
The Maryland Rebates That Still Pay In 2026
Now for the part that matters most.
If you're a SMECO member in St. Mary's County, you have access to some of the strongest HVAC rebates in the country. These come through EmPOWER Maryland, funded by a charge already on your energy bill.
You're paying into this program. You may as well use it.
Here are the main HVAC rebates worth knowing about in 2026:
- Instant HVAC rebates of $800 to $1,700 on qualifying heat pumps, applied right through your contractor
- Whole-home electrification rebates up to $15,000, or 75% of the project cost, when you switch off oil or propane
- $1,600 back on a heat pump water heater, or up to 75% of the unit cost through an authorized installer
- A home energy audit for about $100, a deep discount that unlocks the bigger rebates
The instant rebates are the easiest win. You don't file paperwork or wait for a check.
The discount comes off your price at the time of install. SMECO publishes these programs directly, and the Maryland Energy Administration backs the EmPOWER funding.
Why These Rebates Are Worth Acting On
Heating and cooling can eat up to 50% of your home's energy use, according to SMECO. An efficient heat pump cuts that bill month after month.
So the rebate is only half the story. The savings keep coming long after the discount lands.
Think about it this way. A new HVAC system already pays you back in lower energy bills.
Add a few thousand dollars in rebates on top, and the math gets very friendly. That old, wheezing unit is costing you more than you think every summer.
The whole-home pathway is the big one. If you still heat with oil or propane, switching to a heat pump can unlock that $15,000 figure. Southern Maryland has plenty of homes still running on fuel oil.
How To Claim Your Maryland HVAC Rebate
The process is more straightforward than most people expect.
First, book an assessment with an authorized SMECO contractor. The rebates flow through approved installers, not direct-to-homeowner forms.
Second, choose the right system for your home. The size and efficiency of your heat pump decides which rebate tier you land in.
Third, let the contractor handle the paperwork. With instant rebates, the discount is applied for you.
This is where the right partner matters. At Great Mills Heating and AC, we install qualifying systems and know the SMECO program inside and out.
You can explore our AC repair and replacement services or browse all of our HVAC services to see how we help. We'll match you to the equipment that captures the most rebate value.
Don't Leave Maryland Rebate Money On The Table
Let's bring it home.
The federal credit expired at the end of 2025. That part is disappointing, and the old advice floating around online no longer holds.
But Maryland homeowners still have real, generous rebates in 2026. Instant HVAC discounts, up to $15,000 for electrification, and $1,600 on heat pump water heaters are all on the table right now.
The catch is that programs like these change year to year. The smart move is to act while the funding is strong.
If your AC unit or furnace is on its last legs, this is your moment. We'll help you pick a system, capture every rebate you qualify for, and keep your home comfortable through every Southern Maryland season.
Call Great Mills Heating and AC today at (301) 381-2679, or reach out through our contact page to get started. We're here to help you save.
