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Time-Sensitive Energy Tax Credit Updates: Act Now!

As the global discourse around climate change grows, the U.S. government has been proactive in steering consumers toward sustainable energy solutions through appealing tax credits. These incentives have included deductions for the installation of solar panels, energy-efficient home upgrades, and the purchase of electric vehicles (both new and used). However, significant changes brought about by the legislation dubbed the "One Big Beautiful Bill" are poised to reshape these tax credits, pushing their expiration dates forward and urging consumers to act immediately to benefit from the available tax advantages.

Residential Solar Energy Credits - The Residential Clean Energy Credit has been pivotal in urging homeowners to invest in solar energy solutions. Previously, this credit allowed a substantial 30% tax deduction on the costs of installing solar electric systems. This included expenses for qualified solar electric, solar water heating, geothermal heat pumps, and wind energy systems.

Prior to the revised legislation, the credit was available for systems placed in service by December 31, 2032. The "One Big Beautiful Bill" accelerates this timeline drastically, setting the new expiration date to December 31, 2025. Homeowners must not only install their solar systems but also secure approval from building inspectors before this deadline to capitalize on the credit.

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Home Energy Efficient Improvements Credit - The Energy Efficient Home Improvement Credit encouraged investments in energy efficiency improvements by providing a 30% credit, up to $1,200 annually, for qualifying upgrades like high-efficiency HVAC systems, insulation, and energy-efficient doors and windows.

Originally, qualifying improvements were eligible through December 31, 2032. The new legislative act expedites this deadline to December 31, 2025. This demands that homeowners expedite their improvement plans to leverage the tax benefits. Immediate action is essential, as many upgrades require final approval from local building inspectors.

Credits for Electric Vehicles (EV)

  1. The New EV Credit: The Clean Vehicle Credit incentivized the purchase of new clean vehicles, offering up to $7,500 per new EV placed in service, contingent on fulfilling critical mineral and battery component criteria aimed at bolstering domestic manufacturing and sustainable supply chains.

    Under previous regulations, the credit was available for purchases through 2032. However, the act terminates the benefit for vehicles bought after September 30, 2025, necessitating that consumers hasten their purchasing decisions to seize this opportunity.

  2. The Previously Owned EV Credit: This credit supported the acquisition of used electric vehicles by offering the lesser of $4,000 or 30% of the sale price, with specific qualifications regarding vehicle eligibility, income caps, sales prices not exceeding $25,000, and mandates for sellers to be registered dealers.

    Initially scheduled to end in 2032, the new legislation shifts the expiration to September 30, 2025, urging consumers to act swiftly and resourcefully as vehicle inventories adjust to the legislative changes.

Act with Urgency - The comprehensive overhaul of energy tax credits via the "One Big Beautiful Bill" sends a clear signal to consumers and homeowners: swift action is necessary to avoid missing out on incentives promoting sustainable technologies.

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For those aiming to enhance their homes with renewable energy or add clean vehicles to their residences, the instructions are unequivocal—finalize installations and purchases promptly. All inspections and documentation should be completed well ahead of the impending deadlines.

As these federal tax credits approach their conclusion, the remaining window to benefit closes with each passing day. The "One Big Beautiful Bill" has redefined the legislative framework for environmental initiatives, making decisive action critical to participating in this chapter of supported green energy transitions.

For further inquiries regarding credit qualifications and deadlines, please contact our office.

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