Does a New AC System Qualify for a Federal Tax Credit? Rebates in McKinney, TX

Many McKinney homeowners think a new AC still earns a federal tax credit. The rules changed for 2026, and the honest answer surprises people. So does a new AC system qualify for a federal tax credit, and what rebates apply in McKinney and Texas?

The short version is that the federal credit has ended for new 2026 installs. The better news is that local utility rebates may still help you save. McKinney sits in Oncor's service area, where high-efficiency systems can qualify for support.

We help McKinney homeowners size and document systems so rebate paperwork goes smoothly. We are not tax advisors, so always confirm details with a tax professional and your utility. Below, you will find the federal credit status, the Oncor rebate option, what your system must meet, and how to claim it.

No. The federal Energy Efficient Home Improvement Credit, known as Section 25C, expired on December 31, 2025. A new central AC installed in 2026 does not qualify for that federal tax credit.

Here is what that means for you:

• The federal AC credit is gone for systems installed in 2026.
• Texas has no state income tax, so there is no state credit either.
• Local utility rebates are now the main way to save.

In McKinney, homeowners in Oncor's service area may qualify for HVAC rebates. These rebates apply when you install a high-efficiency system through an approved contractor. Your system must meet certain efficiency standards and include the right paperwork.

We are not tax advisors, so confirm the details with your utility and a tax professional.

Ready to upgrade? Call today about your AC replacement in McKinney, TX.

A new AC does not qualify for a federal tax credit in 2026. The Section 25C credit expired on December 31, 2025. Any central AC installed this year falls outside that program.

Here is the timing that matters:

• Installed in 2026: no federal credit applies.
• Installed and in service by December 31, 2025: you may still claim it on your 2025 return.
• Texas state credit: none, because Texas has no state income tax.

If your system went in before the deadline, talk to a tax professional about your 2025 filing. For new installs this year, the federal credit is no longer an option.

We are not tax advisors, and these rules can change. Always confirm your situation with a qualified professional before you file.

Utility rebates are now the main way to save on a new AC. Even without a federal credit, McKinney homeowners still have a path to lower costs. That path runs through your electric utility.

Most of McKinney sits in Oncor's service area. Oncor runs the Take a Load Off Texas program, which offers HVAC incentives. These rebates reward high-efficiency systems that reduce energy use.

Here is how the Oncor rebate works:

• High-efficiency equipment is required to qualify.
• An approved contractor submits the rebate, not you directly.
• The rebate is passed to you as a discount on your install.
• Funds are limited and seasonal, so apply promptly.

We work with these programs and handle the submission for you. Check your electric bill to confirm Oncor is your provider before you plan.

Not every system earns a rebate. To qualify in McKinney, your new AC must meet a few clear standards. Knowing them before you buy keeps your rebate on track.

Here is what your system needs:

• High-efficiency SEER2 equipment that meets the program's rating.
• A matched indoor and outdoor system with an AHRI certificate.
• A DOE-listed smart thermostat, which some programs require.
• A licensed contractor, since Texas requires TDLR licensing.

The AHRI certificate proves your units work together at the rated efficiency. Without it, most rebate applications are rejected. A matched, properly sized system also runs better in your home.

We provide the AHRI certificate and model numbers you will need. That paperwork keeps your rebate application clean and complete.

A rebate takes a few steps, but we handle most of them. Knowing the order helps you plan your upgrade the right way. Here is how the process works in McKinney.

Follow these steps to keep your rebate on track:

• Get an eligibility review before you buy any equipment.
• Keep your old unit on-site for the required "before" photos.
• Save your invoice, AHRI certificate, and equipment photos.
• Submit within the deadline, since Oncor requires it within 90 days.

Missing a step can delay or cancel your rebate. The "before" documentation proves your old system qualified for replacement. Late submissions are usually rejected with no exceptions.

We manage much of this paperwork for you. Need help planning your upgrade? Reach out to our McKinney team to get started.

A high-efficiency AC saves you money long after any rebate. McKinney summers run long and hot, so your system works hard for months. A better unit lowers your bills across that whole season.

Here is why the upgrade pays off:

• Lower monthly bills during McKinney's long cooling season.
• Better humidity control and comfort in newer homes.
• Right-sizing matters more than chasing the biggest rebate.
• Master-planned-community homes benefit from modern, efficient systems.

Many McKinney homes sit in newer, master-planned communities. These homes pair well with high-efficiency equipment and smart thermostats. A right-sized system keeps every room comfortable without wasting energy.

One McKinney homeowner upgraded to a high-efficiency system and captured an Oncor rebate. Their new unit cut energy use while the rebate trimmed the install cost. If your old system fails before you upgrade, emergency AC repair can keep you cool in the meantime.

A tax credit and a rebate are not the same thing. Both save you money, but they work in different ways. Knowing the difference helps you plan your upgrade.

Here is how the two compare:

• A federal tax credit lowers the federal taxes you owe.
• A local rebate lowers what you pay to install the system.

The federal AC credit is gone for 2026 installs. Local rebates from your utility are still available in McKinney. These rebates come from Oncor's Take a Load Off Texas program, not the IRS.

Texas also has no state income tax, so no state credit exists. That leaves utility rebates as your main savings option today. Always check current programs before you count on them, since the rules change. You can confirm current federal energy credit status at the IRS Energy Efficient Home Improvement Credit page.