The new windows tax credit under Internal Revenue Code Section 25C ended on December 31, 2025. If your qualifying windows were installed by that date, you can still claim 30% of the product cost, up to $600, on the 2025 federal return you file in 2026. Windows installed in 2026 or later do not qualify for any federal credit.
Public Law 119-21, signed on July 4, 2025, amended Section 25C so the credit “will not be allowed for any property placed in service after December 31, 2025.”1Internal Revenue Service. FAQs for Modification of Sections 25C, 25D, 25E, 30C, 30D, 45L, 45W, and 179D Under Public Law 119-21 That cut the credit short by seven years; it had been scheduled to run through 2032.
What “Placed in Service” Means for the 2025 Deadline
The IRS defines “placed in service” as the moment installation is finished and the windows are ready for use. A window you paid for in December 2025 but had installed in January 2026 does not qualify. The installation completion date is what controls, not the purchase date, the order date, or the delivery date.
How Much the Credit Is Worth
The credit equals 30% of the qualifying cost, subject to a $600 annual cap for windows and skylights.2Office of the Law Revision Counsel. 26 USC 25C – Energy Efficient Home Improvement Credit That window cap sits inside a broader $1,200 annual limit covering the whole building envelope, so if you also claimed credits in 2025 for exterior doors ($250 per door, $500 total) or insulation, those shares count against the same $1,200 ceiling.
The limits belong to the taxpayer, not the house. Married couples filing jointly share one set of caps.
What Costs Count
For windows, the credit covers the price of the product only. Installation labor is excluded. The statute includes labor in the credit calculation for certain energy equipment like heat pumps and water heaters, but the provision for building envelope components references only the amount paid for the improvement itself.2Office of the Law Revision Counsel. 26 USC 25C – Energy Efficient Home Improvement Credit On a large job this can be a meaningful chunk of the invoice.
The windows must be new. Original use has to begin with you, and the product must reasonably be expected to last at least five years.3Internal Revenue Service. Instructions for Form 5695 (2024)
Performance Standards
Qualifying windows generally had to meet Energy Star Most Efficient criteria for the climate zone where your home sits, which are tighter than standard Energy Star certification. Eligibility is based on two ratings certified by the National Fenestration Rating Council: the U-factor (how well the window insulates, lower is better) and the Solar Heat Gain Coefficient (how much solar heat passes through the glass). The thresholds vary across four climate zones. In the Northern zone, for example, the 2025 Most Efficient criteria required a U-factor of 0.20 or lower.
Every qualifying window carries an NFRC label listing its certified ratings. The manufacturer also has to provide a certification statement confirming the product meets the federal energy requirements for the year it was placed in service. You don’t send that statement to the IRS, but keep it in case of an audit.4Internal Revenue Service. Energy Efficient Home Improvement Credit Qualified Manufacturer Requirements
Who Can Claim It
The credit applies to improvements on your main home — the place where you live most of the time — and the home has to be in the United States and owned by you. Rental properties and vacation homes do not qualify. Landlords who don’t live in the property cannot claim the credit.5Internal Revenue Service. Energy Efficient Home Improvement Credit
The home must also already exist. Windows installed as part of brand-new construction don’t count; the credit is for upgrading a home that was already built and occupied.2Office of the Law Revision Counsel. 26 USC 25C – Energy Efficient Home Improvement Credit
If your condo association replaced windows building-wide in 2025, you can claim your proportionate share of the cost. The association determines each owner’s share using any reasonable method applied consistently.6Internal Revenue Service. Frequently Asked Questions About Energy Efficient Home Improvements – Qualifying Residence Co-op shareholders use a defined formula: your share equals the proportion of your stock to the cooperative’s total outstanding stock, and only individual tenant-stockholders qualify.
Rebates Reduce Your Qualifying Cost
Utility rebates, manufacturer rebates tied to purchase price, and any subsidy from someone connected to the sale generally have to be subtracted from your qualifying expenses before you apply the 30%. It doesn’t matter whether the rebate came to you or went straight to your contractor.5Internal Revenue Service. Energy Efficient Home Improvement Credit
State incentives are more complicated. Many are labeled “rebates” but may not meet the federal definition of a purchase-price adjustment. A state incentive that doesn’t qualify as a federal rebate isn’t subtracted from your credit calculation, though it may be taxable income on your federal return.
The Credit Is Nonrefundable, and You Cannot Carry It Forward
This is where people lose benefit they expected to receive. The Section 25C credit can reduce your federal income tax to zero, but it cannot generate a refund on its own. If you owe $400 in tax and qualify for a $600 window credit, you get $400 of benefit; the other $200 is gone.
Any unused portion also cannot roll into a future year. The IRS states that “if a taxpayer does not have sufficient tax liability to claim all or a portion of the credit for a taxable year, the unused amount of the credit may never be claimed.”7Internal Revenue Service. Frequently Asked Questions About Energy Efficient Home Improvements – Timing of Credits With the credit terminated, there is no next year to install more windows and absorb the leftover.
How to File on Form 5695
Claim the credit on IRS Form 5695 (Residential Energy Credits), filed with your 2025 federal return. Report window and door costs in Part II, Section A. The calculated credit flows to your Form 1040 and reduces your tax directly.3Internal Revenue Service. Instructions for Form 5695 (2024)
For 2025 installations, you must include a qualified manufacturer identification number on the relevant lines. The IRS is allowing a four-character QM Code in place of a full product identification number for 2025.8Internal Revenue Service. Energy Efficient Home Improvement Credit – PIN Requirements The code appears on the manufacturer’s certification statement or product documentation. If you can’t find it, contact the manufacturer before you file.
Keep your receipts, invoices, and the manufacturer’s certification statement with your tax records. None of it goes with the return, but the IRS can ask for it later, and without the certification your claim is hard to defend.