Claiming an energy tax credit 2025
At a glance
- Energy-efficient home federal tax credits can help reduce your overall tax bill but most of them expire at the end of 2025.
- The Energy Efficient Home Improvement Credit offers up to $1,200 annually for improvements like insulation, windows, and HVAC systems and up to $2,000 per year for qualified heat pumps, water heaters, biomass stoves or biomass boilers through Dec. 31, 2025
- The Residential Clean Energy Credit for renewable energy installations is available through Dec. 31, 2025.
Editor’s note: With the enactment of the One Big Beautiful Bill Act (OBBBA), there are changes to availability of electric vehicle tax credits. Find the updated expiration dates below and get other legislation details on our OBBBA summary page.
Making energy efficient updates to your home is a great move for our environment. But you might feel the pinch in your household budget. There are, however, tax credits you can take on your 2025 return as long as your energy-efficient home improvements are put into service before December 31, 2025.
You may qualify for an energy tax credit if you made renewable energy upgrades or boosted the energy efficiency of your home through improvements like solar or geothermal equipment.
What are home energy tax credits?
Home energy tax credits are government-offered tax incentives meant to encourage taxpayers to use alternative energy resources or improve the energy efficiency of your home. The credit is applied to your income tax liability, reducing what you owe dollar-for-dollar. The credits offer energy savings by offsetting a portion of the costs of energy-saving improvements like solar panels, insulation, windows and doors, and other sources of renewable energy.
File with H&R Block to get your max refund
Energy tax credits: Updates to tax rules
In August 2022, the Inflation Reduction Act amended two credits for energy efficient home improvements and residential clean energy equipment. The legislation renamed and extended the tax incentives, which now have a greater financial impact.
In July 2025, the One Big Beautiful Bill Act (OBBBA) repealed these home energy tax credits.
In this post we’ll cover details for home energy credits, including the:
- Energy Efficient Home Improvement Credit (previously the Nonbusiness Energy Property Credit)
- Residential Clean Energy Credit (previously the Residential Energy Efficient Property Credit)
1. Energy Efficient Home Improvement Credit
It’s important to note that the credit will follow different rules depending on the year the improvement is installed. Read on for details.
Property placed in service in tax year 2022 or earlier
For improvements installed prior to 2023, the Nonbusiness Energy Tax Credit is available for energy efficient home improvements that include building envelope components and energy properties (energy efficient home improvements that increase the heating and cooling efficiency of your primary residence).
This energy tax credit is available for energy efficient home improvements that fall into the following categories:
Building envelope
Eligible items are:
- Insulation material or systems
- Exterior windows, skylights, or doors
- Storm windows and storm doors installed over certain types of windows and doors
- Certain metal roofs
- Certain asphalt roofs
Energy properties
These are home appliances that improve the home’s heating and cooling efficiency. Improvements include:
- Advanced main air-circulating fan used in a natural gas, propane, or oil furnace
- Biomass fuel stoves
- Central air conditioners
- Electric heat pump
- Electric water heaters
- Electric heat pumps
- Natural gas, propane, or oil furnaces
- Natural gas, propane, or oil water boilers
- Natural gas, propane, or oil water heaters
The maximum lifetime credit amount for all types of property combined is $500 for tax year 2022 and all prior tax years. No more than $200 can be claimed for exterior windows. The property must be original use and installed in your main home in the United States.
The Nonbusiness Energy Tax Credit can be claimed on your 2022 or earlier tax return via previous versions of Form 5695 or an amended tax return if you file within three years of the date you filed the original return or within two years of the date you paid the tax for that year (whichever is later). Also, when you claim the credit, make sure to reference the manufacturer’s certification statements to confirm the purchase qualifies.
Property placed in service in tax year 2023 through 2025
The credit allows you to claim 30% of the qualified energy-efficient improvement expenses through 2025. The maximum credit amount is $1,200 per year. The limit per qualifying item is generally $600 ($250 per exterior door up to $400 for all exterior doors). Additionally, heat pumps, heat pump water heaters, biomass stoves, biomass boilers have a separate annual credit limit of $2,000.
The provision also made the following changes:
- Roofs no longer qualify, but air sealing insulation does.
- You can claim the credit for not only a primary residence, but also a secondary one.
- You can claim the Home Energy Audit Tax Credit for 30% of costs up to $150 via Form 5695.
Note that unused Energy Efficient Home Improvement Credit amounts can’t be applied to a future year’s tax return.
2. Residential Clean Energy Credit
The rules below apply to property put in service after Dec. 31, 2021, through Dec. 31, 2025. In other words, you can’t claim the credit for expenditures made in tax year 2026 and beyond.
What property qualifies?
New alternative energy equipment installed in your home may qualify. But, wait…
This includes solar panels, so if your home also has solar panels, you could potentially claim a portion of that cost. Learn more about claiming solar credits.
The credit is nonrefundable, but if you have unused Residential Clean Energy Credit amounts that you didn’t claim on your current year’s tax return, you are able to roll those forward to future years to offset your tax liability.
File Form 5695 (Residential Energy Credits) with your tax return to claim the Residential Clean Energy Credit.
Other ways to save
Clean vehicle tax credit: As part of the Inflation Reduction Act, electric vehicle and fuel cell vehicle owners may qualify for an EV tax credit of up to $7,500. This credit will expire September 30, 2025.
Get help claiming federal energy tax credits
Claiming energy tax credits can be complex, but we’re here to help! Whether you make an appointment with one of our knowledgeable tax pros or choose one of our online tax filing products, you can count on H&R Block to navigate tax deductions and credits.
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