The Federal Window Tax Credit Expired: What Utah Homeowners Can Still Claim

If you have been planning a window replacement project and counting on the federal tax credit to help pay for it, you need to know about a critical change: the Section 25C Energy Efficient Home Improvement Credit expired on December 31, 2025. This credit, which provided up to $600 per year toward qualifying energy-efficient windows, is no longer available for projects completed in 2026.

This guide explains exactly what happened, whether you can still claim anything, and what alternative savings programs are available to Utah homeowners in 2026. For the complete overview of every remaining savings option, see our 2026 Utah window rebates and incentives guide.

What Happened to the Federal Window Tax Credit

The Energy Efficient Home Improvement Credit, codified as Section 25C of the Internal Revenue Code, was originally created as part of the Energy Policy Act of 2005. It has been extended, modified, and reinstated multiple times over the years.

The most recent version was significantly expanded by the Inflation Reduction Act of 2022, which increased the credit rate to 30% of costs and raised the annual cap to $600 for windows. This version covered tax years 2023 through 2025.

Key Facts About the Expiration

• Effective date of expiration: December 31, 2025
• Last eligible tax year: 2025
• Credit amount: 30% of qualifying window costs, up to $600 per year
• Filing form: IRS Form 5695, Part II
• Applicable products: Windows, doors, skylights, insulation, HVAC equipment

The credit was nonrefundable, meaning it could reduce your federal tax liability to zero but could not generate a refund. This limitation meant that some lower-income homeowners could not fully utilize the credit even when it was available.

What Exactly Qualified

Under Section 25C, qualifying windows had to meet these criteria:

• Energy Star Most Efficient or Climate Zone specific certification
• NFRC certified U-factor of 0.25 or lower for Utah (Climate Zone 5)
• Installed in the taxpayer's primary residence (not rentals or second homes)
• Installed during the tax year being claimed

The credit covered the cost of the windows themselves, including manufacturer installation hardware, but did not cover labor costs for installation. This is an important distinction that affected how much homeowners could actually claim.

Can You Still Claim the Credit for 2025 Installations?

Yes, but only under specific circumstances:

You CAN Still Claim If:

• You had qualifying windows installed between January 1 and December 31, 2025
• You have not yet filed your 2025 federal tax return
• The windows met Energy Star requirements for your climate zone
• The windows were installed in your primary residence

You CANNOT Claim If:

• The windows were installed on or after January 1, 2026, even if ordered or paid for in 2025
• The windows were installed in a rental property, vacation home, or second home
• The windows did not meet Energy Star certification requirements
• You already claimed the maximum $600 window credit on your 2025 return for other qualifying windows

How to Claim for 2025

If you have qualifying 2025 installations, follow these steps:

1. Gather documentation: NFRC labels from the windows, contractor invoice showing installation date, and Energy Star certification documentation
2. Complete IRS Form 5695, Part II: Enter your qualifying window costs and calculate the 30% credit (capped at $600)
3. Transfer to Form 1040: The credit amount flows from Form 5695 to Schedule 3, then to your Form 1040
4. File your 2025 return: You have until April 15, 2026 (or October 15, 2026 with an extension) to file

For detailed filing instructions, our historical federal tax credit guide covers the Form 5695 process step by step.

Why the Credit Was Not Extended

The Inflation Reduction Act established a clear sunset date of December 31, 2025 for the Section 25C credit. Several factors contributed to the credit not being extended:

• Budget constraints: Federal budget pressures made extending tax expenditures politically difficult
• Shifting priorities: Congressional focus moved toward other energy policy areas
• Market maturation: The argument was made that energy-efficient windows have become mainstream enough that a tax incentive is no longer needed to drive adoption
• Program design: Unlike the Section 25D solar credit (which continues through 2034), the 25C credits for building envelope and HVAC were given a shorter runway

Is There Any Chance It Returns?

Energy efficiency tax credits have a history of expiring and being retroactively extended by Congress. This happened several times between 2008 and 2022. However, there are no guarantees:

• As of February 2026, no legislation has been introduced to reinstate Section 25C for windows
• The current Congress has not signaled intent to extend expired energy credits
• Even if legislation is introduced, the timeline for passage is unpredictable

Our recommendation is to plan your project based on currently available incentives. If Congress does reinstate the credit retroactively, that would be a bonus, but it should not be the basis for delaying a needed home improvement.

What Savings Programs Replace the Federal Credit

While nothing directly replaces the federal credit's $600 annual value, several programs remain available in 2026:

Rocky Mountain Power Wattsmart Rebates

The largest single incentive for most Utah homeowners:

• $3 per square foot for windows with U-factor 0.22 or lower
• $2 per square foot for windows with U-factor 0.23 to 0.25
• Typical value: $300 to $540 on a 10-window project
• Application: Through the Wattsmart online portal within 90 days of installation

See our Rocky Mountain Power rebate guide for 2026 for full details.

Dominion Energy ThermWise Rebates

For homes heated with Dominion Energy natural gas:

• $1 to $2 per square foot of qualifying window area
• Can be claimed in addition to Rocky Mountain Power rebates
• Check thermwise.com for current program details

PACE Financing

Not a rebate, but an innovative financing tool that eliminates upfront costs:

• Zero down payment with repayment through property tax assessments
• Interest portion may be tax-deductible (consult your tax advisor)
• Available in participating Utah municipalities

Learn more in our PACE financing guide.

Contractor Off-Season Discounts

• 5% to 15% off during winter months (December through February)
• Free upgrades (triple-pane, better glass coatings) as promotional incentives
• Volume discounts for whole-home projects

How to Maximize Savings Without the Federal Credit

The loss of the federal credit makes strategic planning more important than ever. Here are five concrete strategies:

1. Target the Highest Rebate Tier

Choose windows with a U-factor of 0.22 or lower to qualify for Rocky Mountain Power's highest rebate tier ($3/sq ft instead of $2/sq ft). On a 10-window project, this difference alone is worth an extra $150.

2. Time Your Project for Off-Season Pricing

Schedule your installation for December through February to capture contractor discounts of 5% to 15%. A winter installation on a $5,000 project saves $250 to $750. Combine this with any manufacturer promotions running during the same period.

3. Stack Every Available Program

Utility rebates, manufacturer promotions, and contractor discounts all come from different sources and can be combined on the same project. Read our 2026 savings stacking guide for the complete strategy.

4. Consider PACE Financing

If upfront cost is your primary barrier, PACE financing eliminates it entirely. You pay nothing upfront and repay through your property tax bill over 10 to 25 years. This is especially valuable now that the federal credit is no longer available to reduce upfront costs.

5. Do Not Forget Energy Bill Savings

New windows save $101 to $583 per year on energy bills according to the Department of Energy. Over 10 years, that is $1,010 to $5,830 in energy savings, which far exceeds the $600 federal credit that is no longer available. The windows pay for themselves through utility bill reduction regardless of tax credits.

Frequently Asked Questions About the Expiration

Does this affect the solar tax credit?

No. The Section 25D Residential Clean Energy Credit for solar panels, solar water heaters, geothermal heat pumps, and battery storage remains available through 2034 at 30%. Only the Section 25C credit for windows, doors, insulation, and HVAC has expired.

Can my contractor help me claim the credit retroactively?

No. The credit was only available for installations completed during tax years 2023 through 2025. Your contractor cannot change the installation date or help you claim a credit for a 2026 installation. If a contractor promises that the federal credit is still available for 2026 work, that is inaccurate.

Should I wait to replace my windows until the credit comes back?

We do not recommend waiting. There is no timeline or certainty for reinstatement. Meanwhile, you are paying higher energy bills with old windows, and utility rebate programs could also change or end. The best strategy is to use currently available programs and time your project for maximum savings today.

I claimed the federal credit in 2024. Can I claim it again for 2025 work?

If you had additional qualifying windows installed in 2025, yes. The $600 annual cap reset each January 1, so 2025 installations are a separate claim from 2024. You would file the credit on your 2025 tax return using Form 5695.

The federal tax credit was a valuable benefit while it lasted, but its expiration does not mean you should overpay for window replacement. Utah still offers meaningful savings through utility rebates, financing programs, and strategic timing. Start with our comprehensive 2026 rebates and incentives guide to build your savings plan.