IRS Issues New FAQs on Energy Tax Credits: What Homeowners and Businesses Need to Know in 2025

The IRS has just released new FAQs that cover important changes to energy-related tax incentives. These incentives were part of the One Big, Beautiful Bill (OBBBA) and included programs like Sections 25C, 25D, 45L, and 179D. Many businesses, homeowners, and contractors rely on these programs for savings when they invest in clean energy.

But here’s the catch: some of these tax breaks are now set to expire sooner than expected. This means taxpayers need to act fast to capture the benefits before they disappear. On top of that, the IRS is also inviting the public to share feedback on free tax filing options through a survey that’s open until September 5, 2025.

Let’s break this down in simple terms so you can understand what this means for your home, your business, and your wallet.

What Are These Energy-Related Tax Incentives?

Energy-related tax incentives are tax credits or deductions that reward people and businesses for using cleaner, more efficient energy. They are meant to encourage the use of solar panels, energy-efficient windows, better insulation, and even greener building designs.

Here are the big ones covered in the IRS FAQs:

• Section 25C – Credits for making your home more energy efficient (like new windows, doors, or insulation).
• Section 25D – Credits for installing clean energy systems in homes (like solar panels, wind turbines, or geothermal).
• Section 45L – Credits for builders who create energy-efficient homes.
• Section 179D – Deductions for businesses that make buildings more energy efficient.

These programs lower the cost of investing in clean energy. But since they’re expiring earlier than expected, taxpayers have less time to take advantage.

Why Are They Expiring So Soon?

The One Big, Beautiful Bill (OBBBA) was designed to make clean energy more affordable and widely adopted. However, changes in tax policy and budget priorities mean some of these incentives are ending faster than originally planned.

This creates two challenges:

1. Less time to plan – Businesses and homeowners may not have enough time to complete projects before deadlines.
2. Higher costs later – Without credits, the cost of installing clean energy solutions will feel heavier.

The IRS is trying to help by answering questions in these new FAQs, but the bottom line is clear: the clock is ticking.

What the IRS FAQs Cover

The new IRS FAQs give guidance on:

• Which projects still qualify for credits or deductions.
• How to claim the credits on your tax return.
• What deadlines apply for each section (25C, 25D, 45L, 179D).
• How businesses and homeowners should document projects to get the benefits.

For example, a homeowner adding solar panels in 2025 may still qualify for a partial credit under Section 25D. But the IRS stresses that proper documentation—like receipts, certifications, and installation dates—will be critical.

What This Means for Homeowners

If you’re a homeowner, you could lose out on thousands in tax savings if you wait too long. Here’s why:

• Windows and insulation (25C): If you upgrade your home this year, you can claim the credit. But if you wait too long, the credit may be gone.
• Solar panels or wind systems (25D): These clean energy systems are expensive, but credits lower the upfront cost. Acting now means big savings.

Homeowners should talk with their tax professional and make sure their projects are started and documented before deadlines hit.

What This Means for Businesses

Businesses and contractors are also affected:

• Builders (45L): If you build or sell energy-efficient homes, you could lose the ability to claim credits that increase profits.
• Commercial property owners (179D): Upgrading lighting, HVAC, or insulation could mean big deductions. Missing the deadline means higher costs with no tax help.

For many businesses, these incentives make the difference between upgrading now or delaying. Losing them could slow down green building projects across the country.

IRS Survey on Free Tax Filing Options

In addition to the FAQs, the IRS is asking for feedback on free tax filing options. The survey is open until September 5, 2025.

This is important because many taxpayers still find filing confusing and expensive. By collecting input, the IRS could improve or expand its free filing programs, making taxes easier and more affordable for everyone.

If you want to have a say in how tax filing works in the future, this is your chance to share your thoughts directly with the IRS.

How to Take Action Now

Here’s what you should do to avoid missing out:

1. Check the IRS FAQs – See which credits or deductions still apply to you.
2. Start projects soon – Don’t wait until the end of the year. The sooner you begin, the better your chance to qualify.
3. Keep records – Save receipts, certifications, and installation dates. You’ll need them to claim the credits.
4. Talk to a tax professional – Get advice tailored to your situation.
5. Complete the IRS survey – Make your voice heard about free filing options before September 5.

Conclusion

The new IRS FAQs on energy-related tax incentives send a clear message: time is running out. Whether you’re a homeowner installing solar panels or a business upgrading your building, acting quickly could save you thousands in taxes.

At the same time, the IRS is looking for feedback to improve how taxpayers file in the future. Don’t miss the chance to share your opinion.

Tax policy can change fast, and these updates are proof. If you’re serious about saving money and planning smartly, now is the time to act.

👉 Want to know how these changes affect you? Book a free tax assessment call today and make sure you don’t leave money on the table.