A last-ditch effort by some House Democrats to save the federal 25C Energy Efficient Home Improvement Credit is likely to fail, meaning the valuable incentive is nearly certain to expire on December 31, 2025. The credit, which applies to HVAC systems, windows, and other upgrades, was prematurely terminated by the "One Big Beautiful Bill Act" signed in July 2025. 

Key developments

• Expiration deadline confirmed: The 25C credit is confirmed to be ending on December 31, 2025. Homeowners must have qualifying improvements "placed in service" by this date to be eligible. The credit was originally scheduled to run through 2032 under the Inflation Reduction Act.
• Final effort to save the credit fizzles: Despite some House Democrats arguing the credit could be saved on a technicality, Alex Ayers, Vice President of Government Affairs at HARDI (Heating, Air conditioning & Refrigeration Distributors International), stated on September 18, 2025, that the argument is invalid and the credit will almost certainly end as planned.
• Industry groups align: HARDI, the ACCA (Air Conditioning Contractors of America), and other trade groups, such as MIACCA, are preparing for the end of the tax credit. While they would prefer to see incentives continue, they do not want to mislead contractors or consumers into believing the credit will survive.
• No credit for new vehicles: The accelerated sunset date also impacts other incentives. For example, the tax credit for new electric vehicles ends even sooner, on September 30, 2025.
• Last chance for homeowners and contractors: This makes 2025 the final opportunity for taxpayers to claim the 25C credit for projects like installing a new HVAC system. Companies are advising customers to act quickly to avoid missing out on potential savings and to secure installation before contractor schedules fill up toward the end of the year.