New windows are not tax deductible, and the federal tax credit that used to cover them has been eliminated for installations after December 31, 2025. If your windows were installed in your home on or before that date, you can still claim a credit worth 30% of the product cost, up to $600, on your 2025 federal return. Anything installed in 2026 or later gets no federal tax break at all.1Internal Revenue Service. FAQs for Modification of Sections 25C, 25D, 25E, 30C, 30D, 45L, 45W, and 179D Under the One, Big, Beautiful Bill
The distinction between a deduction and a credit matters here. A deduction reduces the income you’re taxed on. A credit reduces the tax you owe, dollar for dollar.2Internal Revenue Service. Tax Credits and Deductions for Individuals Windows never qualified as a deduction on a personal residence. They qualified, until recently, for the Energy Efficient Home Improvement Credit under Section 25C of the tax code.
The 2025 Cutoff
The Inflation Reduction Act had extended the Section 25C credit through 2032. The One, Big, Beautiful Bill, signed on July 4, 2025, moved the termination date up by seven years. Any property placed in service after December 31, 2025 no longer qualifies.1Internal Revenue Service. FAQs for Modification of Sections 25C, 25D, 25E, 30C, 30D, 45L, 45W, and 179D Under the One, Big, Beautiful Bill
“Placed in service” means physically installed. Buying windows in 2025 and having them installed in 2026 does not qualify, because the statute ties the credit to installation rather than purchase.3Internal Revenue Service. Energy Efficient Home Improvement Credit
Claiming the Credit for Windows Installed in 2025
If your windows went in before January 1, 2026, you claim the credit on the 2025 return you file in 2026. Several rules narrow who and what qualifies.
The Credit Is Non-Refundable and Cannot Be Carried Forward
The credit can reduce your tax bill to zero but won’t produce a refund beyond that. If the credit exceeds what you owe, the unused portion is lost. The IRS does not allow you to carry excess amounts forward to a later year.4Internal Revenue Service. Frequently Asked Questions – Energy Efficient Home Improvement Credit – Timing of Credits
Only Your Principal Residence Counts
You must own the home and use it as your main home. Windows installed in a second home, vacation property, or rental do not qualify, and landlords cannot claim the credit for properties they rent out. The credit also applies only to existing homes; windows installed during construction of a new home are excluded.5Internal Revenue Service. Frequently Asked Questions – Energy Efficient Home Improvement Credit – Qualifying Residence
The Dollar Math: 30% Up to $600, Product Cost Only
The credit equals 30% of the cost of the window units, capped at $600 per year across all windows combined. That $600 cap sits inside a broader $1,200 annual ceiling covering windows, exterior doors, and insulation together.6Office of the Law Revision Counsel. 26 U.S. Code 25C – Energy Efficient Home Improvement Credit
Installation labor does not count. For windows, doors, and insulation, only the product cost enters the calculation. Labor is treated differently for heat pumps and certain HVAC equipment, where it does count, but for windows it’s excluded.7Internal Revenue Service. Frequently Asked Questions – Energy Efficient Home Improvement Credit – Labor Costs So on a $5,000 project split as $3,500 in windows and $1,500 in labor, 30% of $3,500 is $1,050, but the $600 cap limits your actual credit to $600.
The Windows Must Meet Energy Star Most Efficient
Not every energy-efficient window qualifies. Windows and skylights have to meet the Energy Star Most Efficient criteria for your climate zone. That is a higher bar than the standard Energy Star label most products carry.8ENERGY STAR. Windows and Skylights Tax Credit
To verify a product, find its Certified Product Directory number on the label and look it up in the National Fenestration Rating Council database at search.nfrc.org. If the field for your climate zone appears shaded green in the results, the product is eligible. If it isn’t green, the window doesn’t qualify no matter what the packaging says.8ENERGY STAR. Windows and Skylights Tax Credit
Subtract Rebates Before Calculating
Rebates from the manufacturer, distributor, or installer based on window cost must come off the price before you apply the 30%. Public utility subsidies for buying or installing energy-efficient products also reduce your qualified cost. State energy-efficiency incentives generally do not reduce your qualified costs unless they function as a direct purchase-price adjustment.3Internal Revenue Service. Energy Efficient Home Improvement Credit
How to File
Report the credit on IRS Form 5695, Residential Energy Credits, Part II.9Internal Revenue Service. About Form 5695, Residential Energy Credits Enter the net cost of the window products after subtracting any qualifying rebates or utility subsidies. The form applies the $600 window cap and the $1,200 aggregate cap and carries the result to Schedule 3 of Form 1040, where it reduces your total tax. Claim the credit for the tax year the windows were installed, not the year you bought them.10Internal Revenue Service. Instructions for Form 5695 (2025)
You don’t submit backup with the return, but keep records in case of audit. Hold onto the manufacturer’s certification statement, itemized purchase receipts that separate window cost from labor, and the Energy Star and NFRC product labels.10Internal Revenue Service. Instructions for Form 5695 (2025) If your contractor gave you a single lump-sum invoice, ask for an itemized breakdown; without that split you can’t accurately compute the credit. Keep these records for at least three years from the date you file.11Internal Revenue Service. How Long Should I Keep Records
Windows Installed in 2026 or Later
No federal tax credit or deduction exists for energy-efficient residential windows installed after December 31, 2025. The One, Big, Beautiful Bill terminated the Section 25C credit that covered windows, doors, insulation, and HVAC equipment effective that date.1Internal Revenue Service. FAQs for Modification of Sections 25C, 25D, 25E, 30C, 30D, 45L, 45W, and 179D Under the One, Big, Beautiful Bill
Some state and local utility rebate programs still offer incentives for high-efficiency windows, though availability and amounts vary widely. Checking with your state energy office or local utility provider is the most reliable way to find current options.