COLORADO TAX CREDIT
$1,000
STATUS
INCOME REQUIREMENT
WHO QUALIFIES
TYPICAL SAVINGS
Qualifying Colorado Installations
Available Now
None
colorado heat pump tax credit
Beginning in 2026, Colorado's heat pump tax credit amounts changed. The total contractor tax credit is $1,000 for qualifying air-source heat pumps, $2,000 for qualifying ground-, water- or combined-source heat pumps, and $250 for qualifying heat pump water heaters.
A&O Heating and Air Conditioning is a registered contractor participating in the Colorado Heat Pump Tax Credit program.
Minimum discounts by System Type
The contractor provides at least these amounts as upfront discounts.
Colorado Tax Credit
YOU QUALIFY IF
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Air-source heat pump
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Ground-source heat pump
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Water-source heat pump
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Combined-source heat pump
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Heat pump water heater
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VRF heat pump system
INSTALLATION MAY NOT QUALIFY IF
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Systems covering less than 80% of heating needs
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DIY installations (must use registered contractor)
Equipment Requirements
System Type | Minimum Discount |
|---|---|
Ground, water, or combined-source heat pump | $667 |
Heat pump water heater | $83 |
Air-source heat pump | $333 |
How does the Colorado heat pump tax credit work?
Colorado's Heat Pump Tax Credit provides an upfront discount when qualifying heat pump equipment is installed by a registered contractor. In 2026, the total contractor tax credit varies by equipment: $1,000 for qualifying air-source heat pumps, $2,000 for qualifying ground-, water- or combined-source heat pumps, and $250 for qualifying heat pump water heaters. There is no income requirement.
How to claim the Colorado heat pump tax credit?
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Work With Registered Contractor - A&O Heating and Air Conditioning is a registered contractor
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Receive Discount at Install - Credit applied directly to your invoice
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Contractor Handles Paperwork - We submit to Department of Revenue
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State Reimburses Contractor - You're done - no further action needed
You don't file any paperwork. A&O Heating and Air Conditioning manages the entire process from quote to state reimbursement. You receive the discount directly at installation.
Why A&O Heating and Air Conditioning?
A&O Heating and Air Conditioning is a registered contractor with the Colorado Department of Revenue for the heat pump tax credit program. We pass the full applicable discount on every qualifying installation. Some contractors retain a larger portion of the credit. We don't.
We handle the entire process: Manual J load calculation to confirm your system covers 80%+ of annual heating needs (the threshold for eligibility), equipment selection from Mitsubishi, Bosch or Carrier permitting, installation, and all Department of Revenue paperwork. Your discount appears on your invoice at installation. You don't file anything.
What A&O Heating and Air Conditioning Offers
A&O Heating and Air Conditioning participates in the Colorado Tax Credit program for heat pumps.
Colorado's state heat pump tax credit remains available in 2026, although incentive amounts have been reduced from previous years.
Stacking Rebates
The Colorado state incentive may also be combined with qualifying utility and other rebate programs when available. A&O can help identify which incentives are currently available for your property.
