Energy Tax Credits in 2026: What Ended, What You Can Still Claim

If you are planning a heat pump, new windows or solar this year, the most important fact about energy tax credits in 2026 is simple: the main federal home credits are gone for new work. The One Big Beautiful Bill Act (Public Law 119-21, signed July 4, 2025) ended the two credits most homeowners used, starting with work done after December 31, 2025. This guide explains exactly what ended, what you can still claim for 2025 projects, and where to look for help now.

What happened to the federal home energy tax credits?

Two credits ended early. The Energy Efficient Home Improvement Credit (section 25C) and the Residential Clean Energy Credit (section 25D) were originally set to run into the 2030s. Public Law 119-21 cut both off at the end of 2025. As of October 18, 2026, there is no federal tax credit for home efficiency or rooftop solar installed in 2026.

The IRS explains the change in its FAQ on Public Law 119-21. The wording for each credit is slightly different, and that difference matters if your project straddled New Year’s Day.

What does “placed in service” or “expenditure made” mean for my project?

These phrases set the cutoff date. For 25C, the test is when the property was placed in service, which generally means installed and ready to use. For 25D, the IRS says an expenditure is treated as made when original installation is completed. Paying a deposit or the full price in 2025 is not enough on its own.

Here is how this plays out in common situations:

• Heat pump installed and running in November 2025: generally claimable under 25C on your 2025 return.
• Windows ordered in October 2025, installed in February 2026: generally not claimable, because they were placed in service in 2026.
• Solar paid in full in December 2025, installation completed in January 2026: the IRS FAQ says this does not qualify for 25D.

If your dates are close to December 31, 2025, collect your contract, invoices, permit sign-off and any utility interconnection letter. A tax professional can then judge which year applies.

What can I still claim on my 2025 tax return?

You can still claim qualifying 25C and 25D work completed in 2025 on your 2025 federal return. You file it with IRS Form 5695, Residential Energy Credits. Most people file 2025 returns in 2026, so this is the last season most homeowners will use these credits for new work.

25C limits for 2025 work

The IRS 25C page lists these limits. The credit equals 30% of qualified costs, up to the caps below.

The $1,200 general limit covers insulation, air sealing, windows, doors, audits and the $600 items combined. The $2,000 heat pump limit sits on top of it. ENERGY STAR’s federal tax credit page summarises the same structure as “up to $3,200.”

Source: IRS, Energy Efficient Home Improvement Credit (as of October 18, 2026).

View data as table

25C item (placed in service in 2025)	Maximum credit
Heat pumps, HP water heaters	$2,000
Windows and skylights	$600
Central AC, furnace, boiler (each)	$600
Electrical panel	$600
Exterior doors (total)	$500
Home energy audit	$150

The QMID rule for 2025 property

For 25C property placed in service in 2025, the IRS says you must report the item’s Qualified Manufacturer Identification Number (QMID) on your return or the credit is not allowed. Insulation and air sealing materials are exempt from this rule. If your paperwork lacks the number, ask your installer for it before you file.

25D for 2025 work

The 25D credit was 30% of the cost of qualifying clean energy property, including certain labor, with no annual dollar cap. It covered solar panels, solar water heaters, geothermal heat pumps, small wind turbines, fuel cells and battery storage. The IRS 25D page says used equipment does not qualify.

Can unused credit help me in 2026 or later?

Sometimes. The 25D credit is nonrefundable, meaning it cannot be larger than the tax you owe. The IRS says you can carry forward any unused 25D credit and use it to reduce tax in future years. That carryforward comes only from qualifying work completed by December 31, 2025. It does not create a new credit for 2026 projects.

For example, if a large 2025 solar installation produced more credit than your 2025 tax bill, the leftover can reduce your tax in later years. Your tax software or preparer tracks the carryforward on Form 5695. The 25C credit works differently, so do not assume a 25C leftover carries over. Ask a tax professional.

I forgot to claim the credit. Can I amend?

Possibly. If you completed qualifying work in a past year and did not claim it, you may be able to file an amended return using Form 1040-X. The general window is about three years from when you filed the original return. Results depend on your tax situation, so talk to a tax professional before you assume a refund.

Steps that usually help:

1. Find the year each project was placed in service or completed.
2. Collect invoices, model numbers, manufacturer certificates and, for 2025 25C items, the QMID.
3. Ask a tax professional whether amending makes sense and which forms to include.
4. Keep copies of everything you send.

What help is still available for 2026 projects?

Federal tax credits are gone for 2026 home upgrades, but other help remains. The biggest federal source is the Home Energy Rebates program, which states run. Utilities, state programs and income-based programs also continue. These are paid as rebates, discounts or free services, not tax credits.

Federal Home Energy Rebates, run by states

The Inflation Reduction Act created two rebate programs worth $8.8 billion combined: Home Owner Managing Energy Savings (HOMES) and the High-Efficiency Electric Home Rebate (HEEHR, which many states call HEAR). The U.S. Department of Energy says HOMES can save households up to $8,000 for whole-home upgrades and HEEHR up to $14,000 for efficient upgrades. Only some states have launched them.

Source: U.S. DOE, Home Energy Rebates Programs (as of October 18, 2026).

View data as table

Program	Federal maximum per household
HOMES (whole-home savings)	$8,000
HEEHR (electric upgrades)	$14,000

DOE changed the rules in 2026. Under Program Notice 26-2, effective May 29, 2026, HEEHR no longer pays to switch from gas, oil or propane to electric, and heat pump rebates are limited to homes that already heat with electricity or to new construction. See our state-by-state home energy rebate guide for which states are live, as tracked by NASEO through its September 30, 2026 update.

Utility and state programs

Many electric and gas utilities offer rebates on heat pumps, smart thermostats, insulation and audits. Some states run their own tax credits or rebates. The Database of State Incentives for Renewables & Efficiency (DSIRE) lists many of them by ZIP code. A subsidised home energy audit through your utility is often the cheapest way to find which upgrades pay off.

Income-based help

If your household income is limited, the Weatherization Assistance Program and the Low Income Home Energy Assistance Program may cover upgrades or bills at no cost. Our guide to help paying energy bills explains how to apply.

Does it still make sense to upgrade without a tax credit?

Often, yes, but the math changes. Without a 30% credit, payback periods get longer. The best value now usually comes from low-cost steps first: air sealing, attic insulation and thermostat settings. Bigger purchases like a heat pump still make sense when your old system is failing or when a state or utility rebate lowers the price.

A practical order of operations:

1. Get an energy audit, ideally one your utility subsidises.
2. Seal air leaks and add insulation where the audit shows gaps.
3. Check state and utility rebates before buying major equipment.
4. Replace equipment at the end of its life rather than early, unless the savings are large.
5. Get at least three written quotes for any large project.

For a ranked list of no-cost and low-cost steps, see our guide on how to lower your energy bill. If a heat pump is on your list, our heat pump cost and savings guide explains what to expect without the federal credit.

Bottom line

For work finished in 2026, there is no federal 25C or 25D tax credit. If you completed qualifying upgrades in 2025, claim them on your 2025 return with Form 5695, include QMIDs for 25C items, and keep your records. For new projects, check your state’s Home Energy Rebates status, your utility and DSIRE before you buy. This article is general information, not tax advice. Confirm your situation with the IRS or a tax professional.