Insights

ACT NOW — Expiring Energy Tax Credits Could Impact Your 2025 Plans

As part of the recently passed One Big Beautiful Bill Act (OBBBA), several federal clean energy tax credits for individuals are set to expire by the end of 2025. If you have been considering energy-efficient upgrades to your home or clean vehicle purchases, you may want to consider taking action soon.

Here are the key credits affecting individuals that are changing:

Section 25C – Energy Efficient Home Improvement Credit. Previously available through 2032, this credit is now limited to eligible improvements placed in service by December 31, 2025. The credit covers 30% of the cost of qualified home upgrades such as exterior windows, skylights, exterior doors, insulation, and home energy audits, subject to annual limits.

Section 25D – Residential Clean Energy Credit. Originally set to expire in 2034, this credit is now only available through December 31, 2025. It provides a 30% credit for the installation of solar panels, geothermal heat pumps, and other equipment that harnesses renewable energy for residential use.

Section 30D – Clean Vehicle Credit. This credit now expires after September 30, 2025, under the OBBBA. Eligible taxpayers who purchase a new electric or fuel cell vehicle may receive up to $7,500, but must meet strict domestic sourcing and modified AGI limits:

  • $300,000 for Married Filing Jointly
  • $225,000 for Head of Household
  • $150,000 for all other filers

Section 25E – Used Clean Vehicle Credit. Set to expire September 30, 2025, this credit allows eligible buyers to claim the lesser of $4,000 or 30% of the sales price on qualifying used clean vehicles purchased through a dealer. Income and vehicle price limits apply.

What is next?

If you are planning to claim one or more energy-related tax credits, it’s important to be aware of the upcoming expiration dates. Reviewing your plans can help ensure you don’t miss out on valuable tax savings. The experienced team at PP&Co can help. Contact us at info@ppandco.com or (408) 287-7911 if you have questions or want to discuss how these updates may affect your specific tax situation.

Click HERE for an overview of the full OBBBA.