Energy Improvements Made in 2025 that Homeowners Can Claim on Their 2026 Tax Return

If you installed energy-efficient upgrades in your home during 2025, you may qualify for federal tax credits when you file your return in 2026. These tax credits reduce the amount of tax you owe dollar-for-dollar, rather than reducing your taxable income.

These credits apply to improvements placed in service during the 2025 calendar year.

Energy Efficient Home Improvement Credit (Section 25C)

This credit applies to specific energy-efficient upgrades made to an existing home. 

For qualifying upgrades completed in 2025, homeowners may claim:

• 30% of eligible costs
• Annual cap of $1,200 total
• Separate $2,000 annual cap for certain heat pumps and HVAC systems

Eligible improvements may include:

• Heat pumps (including ductless systems)
• Heat pump water heaters
• Insulation
• Energy -efficient exterior windows and doors (subject to limits)
• Electrical panel upgrades
• Home energy audits

IRS guidance:
https://www.irs.gov/credits-deductions/energy-efficient-home-improvement-credit

Residential Clean Energy Credit (Solar & Renewables)

If you installed solar panels, geothermal systems, or battery storage in 2025:

• You may qualify for a 30% federal tax credit
• No annual dollar limit
• Must be installed at a primary or secondary residence

IRS resource:
https://www.irs.gov/credits-deductions/residential-clean-energy-credit

Important for 2025 Filers

• You must have owned the home when improvements were installed.
• Save invoices and manufacturer certifications.
• Credits reduce tax liability dollar-for-dollar.
• Unused portions may carry forward in some cases.
  
  

If you’re filing in 2026, only improvements completed in 2025 count toward this year’s return.

If you're unsure and would like more clarity, please don't hesitate to reach out to us. We're always happy to help.

Email: Info@ReeceHomes.com

Call: 206-489-4920