If you’ve been thinking about making certain energy-efficient improvements to your home, now may be a good time to act.
That’s because President Donald Trump’s so-called “big beautiful” budget bill, which Congress passed in July, accelerates the expiration date for two credits aimed at helping Americans pay for energy-efficient home upgrades.
Both the residential clean energy and energy efficient home improvement tax credits expire Dec. 31, meaning you have just about two weeks to take advantage.
The residential clean energy credit generally allows you to claim 30% of the cost of new, qualified clean energy property for your home, whether you own it or rent it — as long as you reside there. Per the IRS, these include:
Solar electric panels Solar water heaters Wind turbines Geothermal heat pumps Fuel cells Battery storage technology
If you make energy-efficient home upgrades before the end of the year, you could also qualify for the energy efficient home improvement credit, which is worth up to $3,200. That includes up to $2,000 for qualified heat pumps, water heaters, biomass stoves or biomass boilers and $1,200 for other energy-efficient property costs, including doors, windows, skylights and home energy audits — with limits per item.
Talk with a tax pro before renovating
Before you start dialing contractors, it may make sense to speak with a tax pro. The language around these credits’ expiration is specific. The residential clean energy credit, per the bill’s language, expires with respect to “expenditures made after December 31.”
The energy efficient home improvement credit, meanwhile, expires for any product “placed in service” after year-end.
For all intents and purposes, this language means the same thing for taxpayers. Any improvements or installations you plan to make must be completed by year-end to qualify for the credit. That means your qualified heat pump, solar panels or energy-efficient doors and windows must be installed, working and paid for by midnight on Dec. 31.
“You have to be very, very careful,” says Miklos Ringbauer, a certified public accountant and founder of MiklosCPA. “This is where you have to do your homework as a taxpayer.”
A project you’re considering might require a lengthy installation or permitting process, Ringbauer says. Even if you pay for it now, you could find yourself holding the bag tax-wise if the work isn’t completed before the applicable tax credit expires, he says.
“With the energy credits, it is incredibly crucial that you have the ability to properly plan it out and [make sure] everything is set,” Ringbauer says. “Don’t leave it down to the wire.”
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