Section 25C Ending in 2026: What Homeowners Need to Know
Section 25C ending in 2026 is why many homeowners are rushing to complete insulation, air sealing, and HVAC upgrades before 12/31/2025.
If you’ve been hearing that the “25C tax credit is cancelled in 2026”, you’re not alone. Homeowners across Southern California are trying to plan attic insulation, air sealing, and HVAC upgrades before incentives disappear. The truth is simple: Section 25C isn’t a surprise “mid-year cancellation” — it has an end date. That end date means upgrades completed in 2026 generally won’t qualify. In this guide, we’ll explain what Section 25C is, what “ending in 2026” really means, and how to make smart decisions (and keep clean documentation) if you want to claim it for 2025.
Disclaimer: This article is for general education only and is not tax advice. Attic Shield is not a CPA or tax preparer. Credit rules can change and your eligibility depends on your situation. For official guidance, see the IRS links below and consult a qualified tax professional.
Table of Contents
- What Is Section 25C?
- Why People Say “25C Is Cancelled in 2026”
- The Real Deadline: “Placed in Service” Explained
- What Improvements Usually Qualify (And What Doesn’t)
- Attic Upgrades That Often Matter Most
- How to Plan Your Project So You Don’t Miss the Credit
- Documentation Checklist (Receipts, Manufacturer Info, Photos)
- Official Resources & Helpful Links
- FAQ
What Is Section 25C?
Section 25C is the federal Energy Efficient Home Improvement Credit. In plain terms, it’s a tax credit that can help offset the cost of certain energy-saving upgrades you make to an existing home. It’s commonly associated with improvements like insulation, air sealing, high-efficiency heat pumps, and certain windows/doors.
The easiest way to think about it is: the government rewards homeowners who reduce energy waste. When your home loses less heat in winter and absorbs less heat in summer, your HVAC system runs less, indoor comfort improves, and you typically spend less on energy over time.
You can read the IRS overview here: IRS: Energy Efficient Home Improvement Credit (25C) . The IRS also maintains a broader page explaining how home energy credits work: IRS: Home Energy Tax Credits .
Important: a tax credit is not the same as a rebate or discount. Credits reduce your tax liability (subject to rules and limitations), while rebates typically reduce the purchase price or reimburse you directly.
Why People Say “25C Is Cancelled in 2026”
When homeowners say “25C is cancelled in 2026,” what they usually mean is: work completed in 2026 generally won’t qualify. That’s because the IRS states that the credit can be claimed for improvements made through December 31, 2025 (in other words, it ends after 2025).
The key point: this isn’t a random cancellation or an IRS surprise. It’s a scheduled end date that shows up on official IRS guidance. Here’s the IRS page that references the credit being available through December 31, 2025: IRS: Energy Efficient Home Improvement Credit .
There is also IRS guidance discussing termination timelines for energy provisions under a 2025 law update: IRS: FAQs on modifications and termination dates (25C) .
So the headline “ending in 2026” is really a shorthand for: the credit ends after 12/31/2025, so 2026 projects are out unless Congress changes the law again.
The Real Deadline: “Placed in Service” Explained
If you want to claim Section 25C for a 2025 project, you need to understand one phrase: placed in service. This does not mean “I signed a contract.” It does not mean “I paid a deposit.” It usually means the improvement is installed and functional.
For example:
- Attic insulation: installed and complete (not half-finished).
- Air sealing: completed as a system (not “we’ll finish next month”).
- HVAC upgrade: installed and operational.
The IRS Form 5695 instructions are one of the best “official” documents to read because they summarize eligibility and timing. Here’s the IRS instructions PDF: IRS: Instructions for Form 5695 (PDF) .
Quick timeline example
Scenario 1 (likely eligible): Contract signed in October 2025 → work completed and installed by December 20, 2025 → you may claim the credit (subject to rules).
Scenario 2 (likely not eligible): Contract signed in November 2025 → work begins in December → final install completes January 2026 → typically not eligible because it was not placed in service by 12/31/2025.
This is why homeowners are trying to plan early: the closer you get to year-end, the harder scheduling becomes — and the risk of missing the deadline increases.
What Improvements Usually Qualify (And What Doesn’t)
Section 25C is not a “home improvement” credit for everything. It’s focused on specific energy efficiency categories. The IRS lists qualifying improvements and rules on its official pages: IRS: 25C Credit Overview and IRS: Form 5695 Instructions (Web) .
Common examples that may qualify (depending on specs)
- Insulation materials (when they meet required standards)
- Air sealing materials/systems (when they meet required standards)
- Certain heat pumps and energy property items (subject to efficiency requirements)
- Some windows, doors, skylights (subject to requirements and caps)
What homeowners often assume qualifies (but usually doesn’t)
Items like pest control, “rodent proofing,” general attic cleaning, and repairs that do not meet a defined efficiency category often do not qualify under 25C. That doesn’t mean those services aren’t valuable — it just means they’re not the same as an energy-efficiency tax credit category.
A smart approach is to treat the credit as a bonus, not the entire reason to do the project. The real value is usually comfort, air quality, and lower HVAC strain — with the credit helping reduce the net cost.
Attic Upgrades That Often Matter Most (Especially in Southern California)
In real homes, energy waste often starts in the attic. Why? Because heat rises, attics get brutally hot, and many homes have hidden gaps where attic air communicates with living space. If your upstairs is uncomfortable, your HVAC runs too long, or your home feels dusty, the attic is often a major part of the story.
1) Air sealing (the upgrade most homeowners skip)
Air sealing is the process of closing the small openings that allow air to move between your attic and living space: penetrations, chases, top plates, bath fan housings, attic access gaps, and more. When air is leaking, insulation can’t perform as intended — because moving air carries heat. If you want to see how we approach it, visit: Attic Air Sealing .
2) Insulation installation (restoring R-value coverage)
Insulation works best when it is evenly installed, dry, and not compressed or contaminated. If insulation is old, flattened, or damaged, your home can lose (or gain) heat fast — which makes the HVAC system run longer. Learn more here: Attic Insulation Installation .
3) Prep work that makes the “energy upgrade” actually work
Sometimes the attic needs to be cleaned and made safe before air sealing and insulation can be done correctly. For example, if there’s construction debris, degraded insulation, or contamination, doing a “quick top-off” is usually a waste. That’s where services like Attic Cleaning and Attic Sanitization can matter — even if the tax credit itself is focused on insulation/air sealing categories.
If ducts run through the attic and are damaged or leaking, that can also impact efficiency and indoor air. See: Duct Repair & Replacement.
How to Plan Your Project So You Don’t Miss the Credit
If Section 25C ends after December 31, 2025, the winning strategy is simple: plan early enough to complete the improvement in 2025. Homeowners who wait until late fall often run into scheduling congestion, supply delays, or scope changes discovered during inspection.
A smart “25C timeline” (homeowner version)
- Step 1: Schedule an attic inspection early (photos + scope). Request here.
- Step 2: Decide whether you’re doing air sealing, insulation, or both (often best together).
- Step 3: Confirm materials meet applicable energy standards (manufacturer info matters).
- Step 4: Schedule installation with enough buffer for weather, access, and any needed prep work.
- Step 5: Save paperwork as you go (don’t wait until tax time).
Homeowners also forget a practical point: even if a credit is available, you still want the upgrade done correctly. A rushed year-end job without full sealing, proper coverage, or clean prep often leads to rework — which costs more than any credit saves.
Documentation Checklist (Receipts, Manufacturer Info, Photos)
The fastest way homeowners lose tax credits is not the install — it’s the paperwork. Even if you qualify, you want clean documentation so your tax professional can file confidently. The IRS uses Form 5695 to claim residential energy credits: IRS: About Form 5695 .
What to save (simple homeowner list)
- Itemized invoice showing what was installed and where (attic insulation, air sealing materials, etc.).
- Proof of payment (card receipt, check copy, financing statement).
- Manufacturer certification statements or product documentation when required.
- Before/after photos of the attic area and improvements (helps show the upgrade was real and completed).
- Completion date (when the improvement was “placed in service”).
At Attic Shield, we document major steps with photos during service (for example: cleanup, sealing, and insulation install), so homeowners have a clearer record of what was done.
Pro tip: keep a “Tax Credit” folder now
Create a single folder (digital or paper) labeled “25C – 2025 Home Upgrades”. Put every receipt, invoice, and product spec sheet in it as you go. When tax time comes, you won’t be hunting through email threads.
Official Resources & Helpful Links
If you want to read it straight from the source, these links are the most helpful:
- IRS: Energy Efficient Home Improvement Credit (25C)
- IRS: Home Energy Tax Credits (overview)
- IRS: Instructions for Form 5695 (PDF)
- ENERGY STAR: Federal Tax Credits for Energy Efficiency
- U.S. DOE: Insulation Basics
- IRS: Termination dates FAQ (mentions 25C end after 12/31/2025)
Related Attic Shield services (internal links)
- Attic Air Sealing
- Attic Insulation Installation
- Attic Cleaning
- Attic Sanitization
- Duct Repair & Replacement
- FAQs
Want to finish eligible upgrades before the 2025 deadline?
Start with a photo-documented attic inspection. We’ll show you the condition of the insulation, the major air leak pathways, and the best plan to restore performance.
FAQ: Section 25C Ending in 2026
Is Section 25C really “cancelled” in 2026?
Most people use “cancelled” to mean the credit won’t apply to 2026 projects. The IRS indicates the credit applies to qualifying improvements through December 31, 2025. That means improvements completed in 2026 typically won’t qualify unless the law changes again.
If I start work in 2025 but finish in 2026, can I still claim it?
Usually, the improvement must be placed in service (installed and functional) by the deadline. Starting in 2025 doesn’t automatically qualify you if completion happens in 2026. Review IRS Form 5695 instructions for details: IRS Form 5695 Instructions (PDF) .
Does rodent proofing qualify for 25C?
Rodent proofing is extremely valuable for protecting insulation and preventing contamination, but 25C is an energy efficiency credit. Homeowners should treat rodent exclusion as a protection step, and focus tax credit expectations on qualifying efficiency categories like insulation and air sealing materials.
What attic work is the most “credit-friendly”?
In many cases, air sealing + insulation is the most impactful combination. If you want to explore these options: Attic Air Sealing and Attic Insulation Installation.
What should I do right now if I want to claim 25C for 2025?
Schedule an inspection early, confirm your scope, plan for completion before December 31, 2025, and save documentation as you go. Start here: atticshield.com/request.
