Duct Sealing Tax Credits and Rebates in 2026: What Still Applies in the Bay Area
If you're counting on a tax credit for duct sealing, the rules have changed. The federal 25C credit ended for work placed in service after December 31, 2025, so duct sealing done in 2026 does not qualify. If your ducts were sealed in 2025, you may still claim 30% of the materials cost only, within a $1,200 annual cap, on your 2025 return. For 2026 work, the main Bay Area option is BayREN's EASE Home program, which covers up to 80% of weatherization costs for income-qualified homes.
Key Takeaways
| Common Question | Short Answer |
|---|---|
| Is there a federal tax credit for Aeroseal or duct sealing in 2026? | No. The 25C Energy Efficient Home Improvement Credit ended for property placed in service after December 31, 2025, under the One Big Beautiful Bill Act. FAQs |
| Can I still claim the credit for duct sealing done in 2025? | Possibly. If the work was completed in 2025 at your principal residence, you may claim 30% of the materials cost, within the $1,200 annual cap, on your 2025 return using Form 5695. |
| Does the air sealing tax credit include labor? | No. For insulation and air sealing, the IRS counts materials only. Installation labor does not qualify. See our price list |
| I paid a deposit in 2025 but the work was done in 2026. Do I qualify? | Generally no. The credit is based on when the work is placed in service, meaning completed, not when you paid. |
| Are there rebates for duct sealing in the Bay Area in 2026? | BayREN's EASE Home program covers 80% of weatherization costs, including duct sealing, for income-qualified single-family homes built before 2010, through a BayREN partner contractor. Statewide HOMES rebates are not yet available. Lower energy bills |
| Will the federal credit come back? | Not under current law. If Congress creates a new incentive, we'll update this page. |
| Is duct sealing still worth it without the credit? | For most leaky systems, yes. In MaxSeal's data from 38 Bay Area systems, sealing cut leakage by 86% on average and raised airflow at the vents by 47%. How much energy leaky ducts waste |
We're HVAC contractors, not tax advisors. Programs change. Confirm with a tax professional and the program administrator before you rely on any incentive.
1. What changed
| Before 2026 | 2026 and later | |
|---|---|---|
| Federal 25C credit for air sealing | 30% of qualified materials, up to $1,200/year combined with other improvements | Ended. The One Big Beautiful Bill Act (§70505) terminated it for property placed in service after Dec 31, 2025 |
| What counts | The date the work was completed (placed in service) | Paying or signing a contract in 2025 does not qualify work finished in 2026 |
| Labor | Not included for insulation and air sealing | — |
| How to claim | IRS Form 5695, Part II, filed with Form 1040 | — |
A correction to our earlier page: It said the credit covered labor. For insulation and air sealing, the IRS counts materials only, not installation labor. We're sorry for the error.
2. If your ducts were sealed in 2025
You may still be able to claim the credit on your 2025 federal return.
| Requirement | What it means for you |
|---|---|
| Placed in service in 2025 | Sealing was completed between Jan 1 and Dec 31, 2025 |
| Principal residence | The home you live in most of the year. Rentals you don't live in don't qualify |
| Existing home | Not new construction |
| Meets IECC standard | Ask us for the Manufacturer's Certification Statement for the sealant |
| Materials only | Your invoice should separate materials from labor. Ask us for an itemized copy |
| Annual cap | 30% of qualified cost, within the $1,200 yearly cap shared with windows, doors, insulation and similar items |
Example: If the materials portion of your 2025 sealing job was $600, your credit is 30% × $600 = $180, provided you haven't used the $1,200 cap on other items.
Deadlines: If you filed an extension, your 2025 return is generally due October 15, 2026. If you already filed without claiming the credit, ask a tax professional about filing an amended return (Form 1040-X).
3. What's available for duct sealing in 2026
| Program | Covers duct sealing? | Who qualifies | Status (Oct 2026) |
|---|---|---|---|
| BayREN EASE Home | Yes. Duct sealing or replacement, air sealing, insulation | Bay Area PG&E customers in single-family homes (1–4 units) built before 2010, household income at or below 120% of area median income | Open. BayREN covers 80% of weatherization costs. Must use a BayREN partner contractor |
| California HOMES (federal home efficiency rebates) | Expected to include whole-home upgrades | All incomes, based on measured energy savings | Not yet available per the California Energy Commission |
| California HEEHRA (heat pump rebates) | No, heat pumps only | Income-qualified | Single-family funds fully reserved, waitlist only |
| GoGreen Home financing | Yes, as a financed upgrade | California homeowners | Low-interest financing through participating lenders |
| PG&E and local city programs | Varies | Varies | Check PG&E's rebate finder and your city's sustainability office |
4. Is duct sealing still worth it without the credit?
For most leaky systems, yes. The credit was a small part of the value: at most 30% of the materials, which is often a small share of the invoice. The bigger return comes from the air you stop losing. In MaxSeal's data from 38 Bay Area systems, sealing cut leakage by 86% on average and raised airflow at the vents by 47%. See how much energy leaky ducts waste and the full results study.
5. How to claim a 2025 credit, step by step
Step 1: Get your paperwork
Ask us for an itemized invoice that shows the completion date and separates materials from labor, plus the sealant's Manufacturer's Certification Statement.
Step 2: Add up qualified costs
Total the materials cost for insulation and air sealing work completed in 2025.
Step 3: Complete Form 5695, Part II
Enter your air sealing and insulation materials in the insulation and air sealing section. The form applies the 30% rate and the annual cap.
Step 4: Carry the credit to your return
The credit carries to Schedule 3 of Form 1040. It is nonrefundable, so it can reduce your tax to zero but won't produce a refund on its own, and unused credit doesn't carry forward.
Conclusion
Duct sealing done in 2026 no longer qualifies for the federal 25C credit. If your ducts were sealed in 2025, you may still claim 30% of the materials cost on your 2025 return.
For 2026 work, BayREN's EASE Home program is the main Bay Area option for income-qualified homes. Confirm the details with a tax professional and the program administrator before you rely on any incentive.
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