How to check energy tax credits before upgrading
The two main federal home energy tax credits are gone for new projects. The efficiency credit (25C) doesn't apply to property placed in service after December 31, 2025, and the clean energy credit (25D) doesn't apply to spending after that date. Don't budget a 2026 upgrade around either one.
What happened to home energy tax credits
Older articles, contractor sales pitches and product pages may still say you'll get 30% back from the IRS. That offer described two federal credits that a 2025 law ended early. The Energy Efficient Home Improvement Credit (section 25C) covered items such as heat pumps, insulation, windows, doors and home energy audits. The Residential Clean Energy Credit (section 25D) covered clean energy systems such as solar.
This check takes a few minutes and should happen before you sign a quote, because a credit in a sales proposal can change whether the job makes financial sense.
When to check energy tax credits for homeowners
Check before you accept any quote for a heat pump, new windows, insulation, a water heater or solar panels. Check again if a salesperson mentions a tax credit, since the current IRS pages outrank anything in a brochure.
The cutoff depends on when the work finished, not when you paid. For 25D, the IRS treats spending as made when the original installation is completed. If you paid in 2025 and the installer finished in 2026, the payment doesn't save the credit. On a newly built or rebuilt home, the date is when you first start using the structure. 25C uses a placed-in-service test.
25C tax credit amounts and the 25D cutoff
| Credit | What it paid | Cutoff |
|---|---|---|
| 25C, Energy Efficient Home Improvement | 30% of certain costs, up to $1,200 a year, plus up to $2,000 a year for qualified heat pumps, water heaters and biomass stoves or boilers | No credit for property placed in service after December 31, 2025 |
| 25D, Residential Clean Energy | Credit for clean energy systems | No credit for spending made after December 31, 2025, using the installation-completed date |
Worked example with made-up numbers: a contractor quotes $10,000 for a heat pump and shows "$2,000 back" on the proposal. Installed in 2026, that $2,000 isn't available under 25C, so your real cost is $10,000 less any utility or state rebate you can verify in writing.
How to check energy tax credits for homeowners
- List the upgrade and its finish date
Write down what you plan to install and when the work would be completed. That date decides the federal answer.
- Read the current IRS page
Open the IRS pages for the home improvement credit and the 2025 law's FAQs before you rely on any other website.
- Strip credits from the quote
Ask the contractor for a price with no federal credit included, so you compare real costs between bids.
- Call your utilities
Ask your electric and gas companies which rebates apply today, and what paperwork they need before the work starts.
- Check state programs
Look on your state energy office's website and note income limits, contractor rules and any reservation step.
- File the paperwork
Keep invoices, product details and proof of the install date in your home records. You'll want them for rebates now and for your basis when you sell.
State rebates now that home energy tax credits have ended
The federal credits ended everywhere, but state programs and utility rebates are separate and differ by state, by utility and sometimes by income. Availability can change during the year as program money runs out. Start with your electric and gas utilities, then your state energy office. Ask for the rebate terms in writing, and find out if the contractor must be on an approved list or if the rebate has to be reserved before work starts.
Heat pump tax credit claims to watch out for
- Proposals that subtract a federal credit from the price. Ask the contractor to show the price without it.
- Old guides. Many pages written before July 2025 still describe these credits as available.
- Assuming a 2025 project is lost. Work completed in time could still qualify, so ask a tax professional about your return.
- Throwing away invoices. Even without a credit, the cost of improvements such as new systems or a new roof can add to your home's basis, which can reduce taxable gain when you sell. Repairs such as painting or fixing a leak generally don't count.
Tax rules depend on your situation. Use this page to plan, and confirm anything affecting your return with the IRS or a tax professional.
Solar tax credit and heat pump questions
Can I still claim the energy efficient home improvement credit in 2026?
Not for property placed in service after December 31, 2025. A qualifying project finished in time belongs to an earlier tax year, so ask a tax professional how to handle it on your return.
Does paying a deposit in 2025 keep the solar tax credit?
No. The IRS says spending under 25D is treated as made when the original installation is completed. If installation finished after 2025, the credit isn't allowed even if you paid earlier.
Are there any incentives left for heat pumps?
There may be, but they come from states and utilities rather than this federal credit. Programs differ by location and can change, so check with your utility and state energy office before you sign.
Sources: IRS
General guidance for U.S. homes, not professional advice. For gas, electrical and structural work, call a licensed pro.