Energy Tax Credits That Ended: 25C, 25D, 45L and 179D Deadlines
The 25C and 25D home energy credits ended after 2025; 45L and 179D end for homes acquired or buildings begun after June 30, 2026. What to tell clients.
By Seayora Editorial Team · Published · Facts checked · 2 min read
Short answer: Public Law 119-21 ended several energy incentives early. The energy efficient home improvement credit (25C) is not allowed for property placed in service after December 31, 2025, and the residential clean energy credit (25D) is not allowed for expenditures made after that date, which for 25D means installation completed. The new energy efficient home credit (45L) ends for homes acquired after June 30, 2026, and the commercial buildings deduction (179D) ends for property whose construction begins after June 30, 2026. A heat pump or solar job finished in 2026 no longer earns a homeowner the federal credit.
Key takeaways
- 25C (heat pumps, windows, insulation): not allowed for property placed in service after December 31, 2025.
- 25D (solar, geothermal, batteries): not allowed for expenditures made after December 31, 2025, meaning installation completed.
- 45L (builders of energy efficient homes): not allowed for homes acquired after June 30, 2026.
- 179D (commercial building improvements): not allowed where construction begins after June 30, 2026.
Which energy credits ended, and when?
| Incentive | Who used it | Ends |
|---|---|---|
| 25C energy efficient home improvement credit | Homeowners: heat pumps, insulation, windows, doors, efficient HVAC | Not allowed for property placed in service after December 31, 2025 |
| 25D residential clean energy credit | Homeowners: solar, geothermal heat pumps, battery storage | Not allowed for expenditures made after December 31, 2025 |
| 45L new energy efficient home credit | Builders and developers of new homes and apartments | Not allowed for homes acquired after June 30, 2026 |
| 179D energy efficient commercial buildings deduction | Owners and designers of commercial and larger multifamily buildings | Not allowed for property whose construction begins after June 30, 2026 |
These dates come from the IRS’s frequently asked questions on the changes made by Public Law 119-21, the 2025 tax law (IRS FS-2025-05).
What does “expenditure made” mean for 25D?
For 25D, the IRS says an expenditure for an item is treated as made when the original installation of the item is completed. Paying a deposit in 2025 did not preserve the credit for a solar system that was finished in 2026.
What should a contractor tell customers now?
- Remove federal 25C and 25D credit claims from proposals, websites and sales scripts for work completed in 2026 or later.
- Do not promise a customer a federal credit; point them to their tax preparer.
- State and utility rebates are separate programs with their own rules and funding, so confirm the current terms with the program before quoting one.
- For builders, the 45L date turns on when the home is acquired, so closing dates after June 30, 2026 matter.
Does this affect landlords?
Rental property owners did not generally use 25C or 25D, which apply to a taxpayer’s own residence. Owners of larger buildings who planned energy upgrades under 179D need construction to begin by June 30, 2026, and developers relying on 45L need units acquired by that date. Depreciation of the improvements themselves is unaffected; see section 179 and bonus depreciation.
Frequently asked questions
Can I still get a federal tax credit for a heat pump in 2026?
Not under 25C. The credit is not allowed for property placed in service after December 31, 2025.
Is the solar tax credit gone?
The residential clean energy credit (25D) is not allowed for expenditures made after December 31, 2025, and the IRS treats an expenditure as made when installation is completed.
When does the 179D deduction end?
It is not allowed for property whose construction begins after June 30, 2026.
Sources
- FAQs for modification of sections 25C, 25D, 25E, 30C, 30D, 45L, 45W, and 179D under Public Law 119-21 (FS-2025-05), Internal Revenue Service
How Seayora helps
Capital projects: Track each building upgrade’s start date, cost and completion in one place.
This article is general information, not tax advice. Tax rules change and your situation is your own, so confirm the treatment with a CPA or enrolled agent before you file.
How we write and check these guides: editorial standards.
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