Do Energy Efficient Windows Still Qualify for Tax Credit?

The federal energy efficient windows tax credit is ending. Under the One Big Beautiful Bill Act, signed July 4, 2025, the Section 25C Energy Efficient Home Improvement Credit is terminated for any property placed in service after December 31, 2025.¹ If your qualifying windows were installed on or before that date, you can still claim the credit on your 2025 federal return. For any windows installed in 2026 or later, no federal credit applies.

The Inflation Reduction Act of 2022 had originally kept the credit alive through 2032. Public Law 119-21 pulled that end date forward by seven years. No replacement residential window credit has been enacted.

Installation Date Is What Counts, Not the Purchase Date

The credit hinges on when the installation was completed, not when you paid. The IRS treats the expenditure as made when the original installation finishes.¹ Windows bought and paid for in December 2025 but installed in January 2026 do not qualify. If your installer is running behind schedule, this is the deadline that matters.

How to Claim the Credit on Your 2025 Return

File IRS Form 5695, Residential Energy Credits, and carry the calculated amount to Schedule 3 of your Form 1040.² Window and skylight costs go on lines 20a and 20b in Part II. The standard filing deadline is April 15, 2026; an extension pushes it to October 15, 2026.

You must report the Qualified Manufacturer Identification Number (QMID) for each window. For 2025 returns, the IRS will not allow the credit unless the product came from a qualified manufacturer and you enter that number.³ Look on the manufacturer’s website, in the product documentation, or call the manufacturer directly. Without a QMID, the credit is denied.

How Much the Credit Is Worth

The credit equals 30% of the cost of qualifying windows and skylights, capped at $600 per year for all windows and skylights combined. That $600 window cap sits inside a broader $1,200 annual ceiling that also covers items like insulation and exterior doors.⁴

Only the window units themselves count. Labor, installation fees, delivery, and disposal are excluded from the calculation.⁴ That surprises a lot of homeowners, because installation labor commonly runs $150 to $300 per window and is often the larger line on the invoice. Ask your installer for an itemized receipt that separates product cost from everything else.

Which Windows Qualified

Windows and skylights had to meet Energy Star Most Efficient certification for the climate zone where the home sits.⁵ Standard Energy Star was not enough. Most Efficient is a higher tier with tighter U-factor and Solar Heat Gain Coefficient thresholds set by the Energy Star Version 7.0 specification, and the thresholds vary by region.

Each qualifying window needs a National Fenestration Rating Council (NFRC) label showing its performance numbers. Only exterior windows separating heated living space from the outdoors count. Windows in unheated garages, detached sheds, or between interior rooms do not.

The Non-Refundable Rule Can Cost You

The credit is non-refundable. It can reduce your federal income tax to zero but will never generate a refund on its own.⁴ If your tax liability is $400 and your window credit would be $600, the extra $200 is lost.

There is no carryforward either. Unused credit does not roll into a future tax year.⁶ With the credit now terminated, there would be no future year to absorb it anyway. This matters most for retirees and lower-income filers whose federal tax liability may already be small.

Who Qualifies

Principal Residence Only

Windows and skylights must be installed in your principal residence. Second homes and vacation properties do not qualify for the window portion of the credit, even though other Section 25C items like heat pumps allow broader use.⁷ Rental properties are excluded entirely. The home must also be an existing structure in the United States; new construction is out.⁴

Home Office Use

Business use of 20% or less of the home has no effect, and you can claim the full credit. Once business use exceeds 20%, the credit is prorated based on the personal-use share of expenses.³ A home used entirely for business gets no credit.

Rebates and Subsidized Financing

Subsidized energy financing must be subtracted from the cost before you calculate the credit.⁸ A utility rebate typically reduces the base for the 30% math too. Pay $2,000, receive a $500 utility rebate, and the credit applies to $1,500. State tax credits generally do not reduce the federal amount.

What to Keep With Your Return

Pull these together before you file:

The Qualified Manufacturer Identification Number for each window, entered on Form 5695.⁹
The Manufacturer’s Certification Statement confirming the product meets Section 25C requirements.
An itemized receipt separating the cost of the window units from labor, delivery, and disposal.
The NFRC label from each window, or photos of it before installation.
The installation completion date and the address where the work was done.

Hold these records for at least three years after filing.¹⁰ The IRS has waived certain manufacturer reporting requirements now that the credit is ending, but the documentation you owe on your personal return is unchanged.¹

What’s Left After the Federal Credit Ends

State and utility programs continue on their own tracks. The Home Efficiency Rebates program, funded by the Inflation Reduction Act and run by individual states, offers up to $8,000 for whole-home efficiency projects that meaningfully cut energy use.¹¹ Whether windows are on your state’s eligible list depends on how the state built its program. Many utilities also run their own rebates for high-efficiency windows.

The Department of Energy’s Home Energy Rebates Portal is the place to check what your state is offering. Amounts, eligibility, and application steps vary widely. These programs were not affected by the law that ended Section 25C, though states will close them as they draw down their federal allocations, so the window to apply is finite here too.

1
Internal Revenue Service. FAQs for Modification of Sections 25C, 25D, 25E, 30C, 30D, 45L, 45W, and 179D Under Public Law 119-21
2
Internal Revenue Service. About Form 5695, Residential Energy Credits
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Internal Revenue Service. Energy Efficient Home Improvement Credit
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Office of the Law Revision Counsel. 26 USC 25C: Energy Efficient Home Improvement Credit
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Internal Revenue Service. Frequently Asked Questions About Energy Efficient Home Improvements and Residential Clean Energy Property Credits – Energy Efficiency Requirements
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Internal Revenue Service. Instructions for Form 5695
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Internal Revenue Service. Frequently Asked Questions About Energy Efficient Home Improvements and Residential Clean Energy Property Credits – Qualifying Residence
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Office of the Law Revision Counsel. 26 U.S. Code 25C – Energy Efficient Home Improvement Credit
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Internal Revenue Service. How to Claim an Energy Efficient Home Improvement Tax Credit – Exterior Doors, Windows, Skylights, and Insulation Materials
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Internal Revenue Service. How Long Should I Keep Records?
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U.S. Department of Energy. Home Upgrades