Energy Tax Credits Set To Expire

The One Big Beautiful Bill Act (OBBBA), passed in 2025, included changes to energy-related tax incentives. Most notably, it accelerates the expiration timeline for several energy tax credits originally extended under the Inflation Reduction Act.

If you’re planning to make energy-efficient home improvements or purchase an electric vehicle, now is the time to act.

Here’s what’s set to expire and when:

Key Energy Tax Credits Expiring Soon

1. Energy Efficient Home Improvement Credit (Section 25C)

• Provides 30% credit (up to $1,200 annually) for improvements like insulation, windows, doors, and HVAC upgrades.
• Includes an additional $2,000 credit for heat pumps and biomass stoves.
• Expires: December 31, 2025

2. Residential Clean Energy Credit (Section 25D)

• Offers a 30% credit for solar panels, geothermal heat pumps, small wind turbines, battery storage, and more.
• Expires: December 31, 2025

3. Electric Vehicle (EV) Tax Credit

• $7,500 credit for new EVs and $4,000 for used EVs that meet qualifying standards.
• Expires: September 30, 2025

4. EV Charging Station Credit (Section 30C)

• 30% credit (up to $1,000) for installing a home EV charger.
• Expires: June 30, 2026

What You Should Do Now

• Complete home energy improvements before December 31, 2025.
• Purchase a qualifying EV before September 30, 2025.
• Install a home EV charger before July 1, 2026.
• Talk to your tax advisor early to ensure you meet all eligibility criteria.

These incentives can provide significant savings for homeowners and drivers—but only if you act before the clock runs out. If you have questions about your eligibility or need guidance on how to take advantage of these credits, DWD CPAs & Advisors is here to help.