The One Big Beautiful Bill Act (OBBB) brings major updates to energy and clean vehicle tax credits, making 2025 a critical year for homeowners and car buyers looking to maximize savings.
Energy Credits
If you’re considering making energy-efficient or clean energy improvements to your home, now is a great time to act, as two valuable tax credits—Section 25C (Energy Efficient Home Improvement Credit) and Section 25D (Residential Clean Energy Credit)—are set to expire for property placed in service after December 31, 2025. Section 25C covers improvements like new energy-efficient windows, doors, insulation, central air conditioners, heat pumps, and certain electrical upgrades for your primary residence, with a credit of 30% of the cost (up to annual limits). Section 25D offers a 30% credit for installing solar panels, solar water heaters, geothermal heat pumps, small wind turbines, fuel cells, and battery storage systems in your home (including second homes, except for fuel cells). For both credits, labor and installation costs are generally included for most equipment. If you’re thinking about projects such as upgrading your windows, adding insulation, installing a new heat pump, or putting solar panels on your roof, completing these before the end of 2025 can help you maximize your tax savings before these credits expire.
Clean Vehicle Credits
The OBBB has accelerated the expiration of both the Section 25E (previously owned clean vehicle credit) and Section 30D (new clean vehicle credit). These credits, which provide up to $4,000 for qualifying used clean vehicles and up to $7,500 for qualifying new clean vehicles, will now expire for vehicles acquired after September 30, 2025. This is a significant change from the original 2032 expiration. Both credits have strict requirements for vehicle price, buyer income, and vehicle eligibility. You can check if a specific vehicle qualifies using the official Department of Energy website: New vehicles, Used vehicles, or the VIN lookup tool. If you’re considering purchasing a clean vehicle, you should consider purchasing before October 1, 2025, to help maximize your tax savings.
