Straight answer · sourced
The 25C tax credit is over for 2026 installs.
The federal Energy Efficient Home Improvement Credit (Section 25C) was terminated for any property placed in service after December 31, 2025 by Public Law 119-21, enacted July 4, 2025. The IRS states it plainly: “The credit will not be allowed for any property placed in service after December 31, 2025.”
Installed 2026 or later
No federal 25C credit. None. This includes projects contracted or deposited in 2025 but completed in 2026 — the law treats an install completed after December 31, 2025 as made after that date. State and utility rebates may still apply; the federal line is gone.
Installed during 2025
Still claimable on your 2025 return: 30% of qualified cost, $1,200 general cap ($2,000 for heat pumps and heat-pump water heaters), per-item caps, CEE-highest-tier equipment only — and the 4-character manufacturer QMID per item on Form 5695. Ask your installer for the QMID with your itemized invoice.
Sources — check them yourself
Public Law 119-21 (July 4, 2025) · IRS FAQ on P.L. 119-21 modifications to §§25C, 25D, 25E, 30C, 30D, 45L, 45W, 179D · IRS 2025 Instructions for Form 5695 (“You can’t claim energy efficient home improvement credits for expenditures or property placed in service after December 31, 2025”). This page states the law as of its publication date and does not constitute tax advice — confirm your specific situation with a tax professional.
Why a software company is telling you this
Morthn runs the back office for service businesses, and our platform includes a hard gate: it refuses to let anyone promise the 25C credit on a 2026 install — in a quote, a text, or an ad — because a dead-credit promise under your business’s name is a liability, not a selling point. The same engine tracks the incentives that do still exist: manufacturer warranty-registration windows, utility rebates with their AHRI paperwork, and state programs.