Federal Energy Efficient Home Improvement Tax Credit (25C)

About This Program

The IRS Section 25C tax credit provides 30% of qualifying upgrade costs each year, up to $3,200 annually ($1,200 for insulation, windows, doors, and audits; $2,000 for heat pumps and water heaters). Unlike a deduction, this directly reduces federal income tax owed. The credit resets each tax year through 2032, allowing multiple years of improvements to capture the full benefit.

30% of upgrade cost, up to $3,200/year. A $10,667 in upgrades per year captures the full $3,200 credit. Stacks with Xcel and HEAR rebates (rebates reduce the cost basis before calculating the credit).

Key Details

• 30% of qualifying upgrade costs, directly reduces federal taxes owed
• Up to $1,200/year for insulation, windows, doors, energy audits
• Up to $2,000/year for heat pumps or heat pump water heaters
• Credit resets every tax year through December 31, 2032
• Stacks with Xcel rebates and HEAR rebates, consult a tax professional

How to Apply

Deadline: December 31, 2032 (annual credit, resets each tax year)