The Federal Window Tax Credit Expired. Here's What Replaced It

For two decades, “there’s a federal tax credit” was the closing line of every window sales pitch in America. As of January 1, 2026, it isn’t true anymore, and a surprising share of websites and sales scripts haven’t caught up. Here’s exactly what changed, what you can still claim, and where the real money moved.

What happened

The Energy Efficient Home Improvement Credit (Section 25C of the tax code, the credit that covered windows, doors, insulation, and heat pumps) was terminated for property placed in service after December 31, 2025. The termination came in Public Law 119-21 (the budget reconciliation act signed July 4, 2025, commonly called the One Big Beautiful Bill Act), which ended a credit that had been scheduled to run through 2032.

“Placed in service” is the phrase that matters: eligibility follows when the windows were installed and operational, not when you signed the contract or paid. Windows installed in December 2025 qualify; the same windows installed in January 2026 don’t.

If your windows went in during 2025

You can still claim the credit on your 2025 federal return. The final-year rules:

• 30% of product cost, with installation labor excluded for windows.
• $600 annual cap for windows and skylights, inside a $1,200 annual cap for building-envelope improvements overall.
• Windows must have been ENERGY STAR Most Efficient certified, a stricter bar than base ENERGY STAR.
• 2025 returns require the Qualified Manufacturer ID (QMID/PIN) for the product. Your installer or the manufacturer’s website can supply it; get it now rather than at filing time.

Keep the itemized invoice separating product from labor; the credit only ever applied to the product portion.

Where the incentive money lives now

State IRA rebate programs (the big one)

The Inflation Reduction Act’s Home Energy Rebates, the HOMES (whole-home, modeled/measured savings) and HEAR (electrification, income-qualified) programs, were not affected by the 2025 law. They’re administered by states, funded through 2031 or until each state’s allocation runs out, and live in roughly two dozen states as of mid-2026, including Colorado, Minnesota, Michigan, New York, Wisconsin, and most of the West Coast and Northeast.

Two things to understand about how windows fit:

1. Windows ride along; they rarely star. Most programs pay for whole-home retrofits that hit a modeled energy-savings target. A window-plus-air-sealing-plus-insulation project can qualify; a windows-only project usually needs exceptional modeled savings to clear the bar.
2. The audit is the entry ticket. Programs pay against documented baselines. A utility or state-approved home energy audit is almost always step one, and utilities frequently rebate the audit itself.

Two states declined the program entirely: Florida and South Dakota. If you’re there, skip to the insurance section below.

Utility programs

Independent of the IRA money, most large utilities run efficiency programs funded by ratepayer charges: audits, weatherization incentives, and envelope measures that window projects can join. These existed before the federal credit and survive it. Check your electric and gas utility’s efficiency pages, and note that many pay through participating contractors, which is worth knowing before you pick an installer.

Hurricane states: insurance credits instead of rebates

In Florida, which has no state rebate program, the real window money is in wind mitigation insurance credits. Insurers are required to offer premium credits for documented wind-resistance features, and impact-rated openings are one of the largest line items on the inspection form. On Florida-level premiums, those credits recur every year, which over a decade can rival what the old federal credit was worth once. Texas coastal counties have a related dynamic through TDI windstorm certification (WPI-8) and TWIA insurability.

The new sales-pitch smell test

The credit’s expiration created a simple, useful filter for vetting window companies:

• A pitch that still advertises the federal credit tells you the company’s compliance and training are a year behind — worth wondering what else is.
• A pitch that names a real program (your state’s HOMES program, your utility’s rebate, a wind-mitigation credit) and offers to document eligibility in writing is showing you diligence you’ll want at install time too.
• “Tax credit expiring soon — sign today” urgency is now doubly wrong: the federal credit is already gone, and the live state programs are multi-year. Deadline pressure is a negotiating posture, not a fact about incentives.

Quick reference: where states stand

As of mid-2026, the state IRA rebate map breaks roughly three ways:

• Live programs (apply now, windows can qualify within whole-home retrofits): Arizona, California, Colorado, Connecticut, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Hampshire, New Jersey, New Mexico, New York, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, Washington, and Wisconsin.
• Accepted but still rolling out (funding allocated, launch status varies; verify with the state energy office before counting on it): most of the remaining states, including Texas and Ohio.
• Declined entirely (no state program now or later): Florida and South Dakota.

Program design differs state to state (income tiers, per-home caps, and whether the modeled-savings or measured-savings pathway applies), so treat this list as a map of where to look, not a promise of what you’ll get. Funding is finite and first-come: several early-launch states have already paused program tiers when tranches ran dry, which is a reason to start with the audit sooner rather than later.

What this means for project math

Losing 25C raised the effective cost of a typical windows project by up to $600 a year of purchases: real but modest against project totals. The bigger shift is that incentives went from uniform-federal to state-by-state: identical projects in Minneapolis and Tampa now have completely different incentive profiles (live HOMES program vs. insurance credits). That’s exactly why our local research pages track incentives per metro; check yours before assuming either that there’s nothing available or that a salesperson’s number is current.

For the full picture of what windows cost with and without incentive help, start with our window replacement cost guide, or get a local quote and ask the installer to put every claimed incentive in writing.

Frequently asked questions

›Can I still get the federal tax credit for replacement windows?

Not for new projects. The 25C Energy Efficient Home Improvement Credit was terminated for property placed in service after December 31, 2025, under Public Law 119-21. If your windows were installed and operational during 2025, you can still claim that year's credit on your 2025 tax return.

›How much was the window credit worth in its final year?

For 2025: 30% of product cost (labor excluded), capped at $600 per year for windows and skylights, inside a $1,200 annual cap for building-envelope improvements. Windows had to be ENERGY STAR Most Efficient, and 2025 returns require the manufacturer's Qualified Manufacturer ID (QMID/PIN).

›What incentives exist for windows now?

State-run IRA Home Energy Rebate programs (live in roughly two dozen states, funded through 2031 or until money runs out), utility efficiency programs that pay against home energy audits, and, in hurricane states like Florida, insurance premium credits for impact-rated openings. Availability depends entirely on your state.

›A window salesperson told me the federal credit still applies. What should I do?

Treat it as a red flag about the company's diligence, not a bonus. The credit's termination has been law since July 2025. Ask them to put any claimed incentive in writing with the program name; legitimate installers will happily do this for real state and utility programs.

›Do the state rebate programs cover windows specifically?

Usually indirectly. Most live programs pay for whole-home efficiency retrofits with modeled or measured energy savings (the HOMES pathway); window replacement counts when part of a project that hits the savings target, commonly paired with air sealing and insulation. Standalone per-window rebates are rarer and mostly utility-run.

Sources

• — IRS: Energy Efficient Home Improvement Credit (25C); FAQs under Public Law 119-21 (One Big Beautiful Bill Act, July 4, 2025)
• — U.S. Department of Energy: IRA Home Energy Rebates state allocations and program status
• — State energy office program pages (verified July 2026)
• — Florida Office of Insurance Regulation: wind mitigation premium credit requirements