Illinois furnace rebates for 2026, and why the federal tax credit is gone

These figures were checked directly against Nicor Gas, the IRS and the Illinois EPA on September 25, 2026. Utility programs change their terms and dollar amounts without much notice, so treat this as a starting point and confirm the current numbers before counting on one.

The short version: one national program just ended, one utility program is still running, and two more haven't started yet. Here's what's actually usable on a furnace installed this year.

The federal credit that used to help

For years, a federal tax credit knocked a real amount off a high-efficiency furnace. That credit, known as 25C, is gone for 2026. The IRS's own page is direct about it: "The credit is allowed for qualifying property placed in service on or after Jan. 1, 2023, and before December 31, 2025" (IRS.gov). A furnace installed in 2026 does not qualify, no matter how efficient it is. If a cost estimate online still counts a federal tax credit toward a 2026 furnace, it's out of date.

Through 2025, that credit covered 30% of a qualifying furnace's cost, up to $600 a year (IRS.gov). On a new furnace, that meaningfully lowered the total cost. None of it carries over to a furnace installed from January 1, 2026 onward, no matter how efficient the equipment is.

A utility rebate works differently from a tax credit, which is worth knowing before assuming one cancels out the other. A tax credit reduces what's owed on a tax return the following spring. A utility rebate is a payment or account credit from the utility itself, applied for directly with them after the equipment goes in. They were never the same mechanism, which is exactly why Nicor's program below is still running even though the federal credit above is not.

What Nicor Gas still offers

Nicor Gas, the gas utility for most homes in this area, is still running a furnace rebate for 2026, and the amount depends on the furnace's efficiency (Nicor Gas):

• 97% AFUE or higher: $225, or $275 bundled with a qualifying smart thermostat on the same application
• 95% to 96% AFUE: $150, or $200 bundled with a qualifying smart thermostat
• Smart thermostat alone: $25, limited to one per household

AFUE is the share of the fuel a furnace burns that actually becomes heat for the house rather than escaping up the flue; it's the number on the equipment's own spec sheet, and it's what sorts a given furnace into one of the tiers above.

The furnace has to be installed between January 1 and December 31, 2026, with the rebate applied for within 90 days of installation or by January 31, 2027, whichever comes first (Nicor Gas). The AFUE number on the equipment's own spec sheet decides the tier, so it's worth confirming before the furnace is ordered, not after.

These tiers exist because they track how much gas a furnace actually saves over its life: a 97% AFUE furnace burns noticeably less gas than a 95% one, so the rebate is larger to match.

What ComEd offers

Gas and electric utilities in this area run separate rebate programs, which is worth knowing before assuming one company's number applies across the board. Nicor, above, covers gas equipment. ComEd covers the electric side, and rebate programs from an electric utility typically center on electric equipment rather than a gas furnace itself, though that's a general pattern, not a ComEd-specific number.

ComEd's programs change during the year, so this article doesn't name an amount. If ComEd serves your electric account, check comed.com for the current program before planning around a number.

The state programs that aren't open yet

Two newer, larger rebate programs, HOMES and HEAR, are funded through federal dollars and administered by the Illinois EPA. Neither is open for homeowner applications yet. The Illinois EPA's own page says the HOMES program launch "is pending USDOE approval," and that the HEAR program's own paperwork "has not yet been processed by USDOE or provided to Illinois EPA for administration or distribution" (Illinois EPA). Don't plan a 2026 project around either one; there's no application to submit yet.

How to actually get what's real

• Confirm your gas utility. Most homes around Algonquin and Crystal Lake are on Nicor Gas, and the rebate above applies to a 2026 installation.
• Check the AFUE on the specific furnace being quoted, since that number decides which rebate tier applies.
• Stay inside Nicor's window: install by December 31, 2026, and apply within 90 days or by January 31, 2027.
• Keep the installation date and the equipment's AFUE spec sheet together, since Nicor's application window is tied to both.
• Check comed.com directly if ComEd is your electric utility, rather than relying on a number from anywhere else, including this page.
• Leave the federal tax credit and the state HOMES/HEAR programs out of a 2026 budget. Neither applies yet, and one of them never will again.

None of this changes what a furnace replacement costs before a rebate; it only affects what comes back afterward, and it's worth confirming before the equipment is ordered rather than after the invoice is written. For the separate question of whether your current furnace is worth repairing first, see repair or replace: when an old furnace is worth fixing.

If you're ready to plan a replacement around what's actually available this year, tell us about your furnace.