What Is the Tax Credit for Energy Efficient Windows?

If you installed energy-efficient windows in your home by December 31, 2025, the federal tax credit for energy efficient windows is worth 30 percent of what you paid for the window materials, capped at $600 per year.¹ The credit comes from Section 25C of the Internal Revenue Code, which the Inflation Reduction Act of 2022 expanded.² Under current law it does not apply to property placed in service after December 31, 2025, so a return filed in 2026 can still claim windows finished during the 2025 tax year, but new installations after that date do not qualify unless Congress acts.³

How Much You Can Actually Claim

The math is 30 percent of the cost of qualifying window materials. Labor and installation charges do not count for building envelope components like windows, doors, and insulation.³ Pay $4,000 for windows and $1,500 to have them installed, and only the $4,000 goes into the calculation.

Thirty percent of $4,000 is $1,200, but the IRS caps the annual credit for exterior windows and skylights at $600. That $600 sits inside a broader annual ceiling of $1,200 for combined building envelope improvements, which also includes insulation and exterior doors (doors have their own sub-limits of $250 per door and $500 total).¹

The credit is nonrefundable. It reduces your federal tax bill dollar-for-dollar but cannot drop your liability below zero. If you owe $400 and qualify for the full $600, you save $400 and the remaining $200 disappears. There is no carryforward to future years.¹

You claim the credit for the tax year the windows were actually installed, not the year you bought them. Windows purchased in November 2025 but finished in January 2026 fall outside the December 31, 2025 cutoff under current law.³

Which Windows Qualify

Not every energy-efficient window earns the credit. The windows must carry the Energy Star Most Efficient designation for the year they were installed, a higher bar than standard Energy Star certification.¹ Confirm this at the point of sale rather than discovering the difference at tax time.

Eligibility turns on two performance metrics printed on the National Fenestration Rating Council (NFRC) label attached to each window: the U-factor, which measures insulation against heat loss, and the Solar Heat Gain Coefficient (SHGC), which measures how much solar heat passes through the glass. Both must hit specific thresholds that vary by climate zone. Under the 2025 Most Efficient criteria, the Northern zone required a U-factor of 0.20 or lower with a SHGC of 0.20 or higher, while the Southern zone allowed a U-factor of 0.22 but required the SHGC to stay at 0.21 or below.⁴ Keep the NFRC labels. They are your proof of eligibility if the IRS ever asks.

Who and What Property Qualifies

The windows must be installed in an existing home in the United States. New construction does not qualify.¹ The home must be your principal residence, meaning where you live most of the year. Vacation homes, rental properties held out to tenants, and investment properties are all excluded.

Renters, Condo Owners, and Co-op Shareholders

For windows specifically, you must own the home. Renters who pay for window upgrades in their rental cannot claim this credit, even if the rental is their primary residence.⁵ That ownership rule is stricter for windows than for some other items covered by Section 25C.

Condominium and co-op owners are eligible. If the association or co-op board pays for building-wide window replacements, each owner-occupant claims a proportionate share. Co-op shares follow the formula in Section 216 of the tax code. For condos, the association’s governing body determines each owner’s share using any reasonable method, as long as it applies that method consistently.⁵

Homes Used Partly for Business

If you run a business from home, the treatment depends on how much of the home is devoted to business use. At up to 20 percent business use, you still receive the full credit. Above 20 percent, the credit shrinks to reflect only the residential share of expenses. A home used entirely for business gets no credit.¹

The Product Identification Number Requirement

For windows placed in service in 2025, the IRS added a new requirement: the product must have been made by a qualified manufacturer, and you must include a product identification number (PIN) on your return. Without the PIN, no credit is allowed. Insulation and air sealing materials are the only items exempt from this rule.¹

The PIN is a 17-character alphanumeric code unique to each window unit. The manufacturer must furnish it to you no later than when the property is placed in service or when you request it.⁶ If you installed qualifying windows in 2025, get the PIN from your manufacturer before you sit down to file. Tracking one down after installation is a hassle.

How to Claim It

You claim the credit on IRS Form 5695 (Residential Energy Credits), which handles the 30 percent calculation, the $600 window cap, and the overall $1,200 annual limit.⁷ Enter only the cost of materials on the lines for energy-efficient building envelope components. Including labor will inflate the calculation and could cause problems with your return. The final credit amount carries from Form 5695 to your Form 1040.⁸

Most tax software handles the form linkage automatically once you answer the energy improvement prompts. Paper filers should attach Form 5695 to the 1040 before mailing.

Documentation to Keep

Before filing, pull together:

Your purchase receipt, with window material costs shown separately from labor and installation.
The 17-character product identification number for each window unit installed in 2025.
The NFRC performance label from each window, showing that it meets Energy Star Most Efficient criteria.

The IRS advises keeping these records as long as they could be relevant to any future tax matter. Because the credit reduces your home’s cost basis under Section 25C(g), that may mean holding the documents until you sell the property.⁹

State Rebates and Utility Incentives

Many states and utility companies offer their own rebates for energy-efficient windows. Whether those rebates reduce your federal credit depends on the type of incentive. A rebate tied to the purchase price of the window from the manufacturer, distributor, or installer gets subtracted from your qualifying expenses before you calculate the 30 percent. Utility subsidies for buying or installing the property are also subtracted.¹

State-funded energy incentives generally are not subtracted from your qualified costs unless they meet the specific definition of a purchase-price adjustment under federal tax law. Many state programs use the word “rebate” for payments that don’t technically qualify as one for federal purposes. Those state payments may instead count as taxable income on your federal return.¹ If you received a state incentive and aren’t sure how to handle it, check with a tax professional.

What Happens After 2025

Under the statute as currently written, Section 25C does not apply to property placed in service after December 31, 2025.³ Windows installed in 2026 or later do not qualify unless Congress extends or replaces the credit. If you’re filing in 2026, the credit still applies to any qualifying windows your contractor finished by December 31, 2025, so file Form 5695 for that work. Energy-related tax credits have been extended and modified repeatedly over the past two decades, so any planned future installation is worth checking against the law in effect at the time.

1
Internal Revenue Service. Energy Efficient Home Improvement Credit
2
Internal Revenue Service. Home Energy Tax Credits
3
Office of the Law Revision Counsel. 26 USC 25C Energy Efficient Home Improvement Credit
4
Energy Star. Residential Windows and SGD ENERGY STAR Most Efficient 2025 Criteria
5
Internal Revenue Service. Frequently Asked Questions About Energy Efficient Home Improvements and Residential Clean Energy Property Credits – Energy Efficient Home Improvement Credit – Qualifying Residence
6
Internal Revenue Service. Frequently Asked Questions About Energy Efficient Home Improvements and Residential Clean Energy Property Credits – Energy Efficient Home Improvement Credit – Qualified Manufacturer
7
Internal Revenue Service. About Form 5695, Residential Energy Credits
8
Internal Revenue Service. Instructions for Form 5695 (2025)
9
Internal Revenue Service. Frequently Asked Questions About Energy Efficient Home Improvements and Residential Clean Energy Property Credits – Energy Efficient Home Improvement Credit – General Questions