In The Know: 25c Tax Credit

Are you looking to upgrade your home’s windows while also saving money? The Energy Efficient Home Improvement Credit (also known as the 25C tax credit) can help you do just that! This valuable tax credit provides financial incentives for homeowners who invest in energy-efficient home improvements, including window replacements. Here’s what you need to know about this tax credit and how it benefits you.

What is the 25C Tax Credit?

The 25C tax credit is part of the Inflation Reduction Act and is designed to encourage homeowners to make energy-efficient upgrades. This tax credit was created in October of 2023. It allows homeowners to claim a percentage of their expenses for qualifying home improvements, such as energy-efficient windows, doors, and insulation. This credit helps reduce your tax liability, making your home upgrades more affordable.

Lower Your Tax Bill

The 25C tax credit allows you to claim up to 30% of the cost of eligible energy-efficient improvements, including window replacements, with a maximum annual credit of $600 for windows. 

How to Qualify for the 25C Tax

• The windows must meet the Energy Star “Most Efficient” criteria for our climate zone

• The windows must be installed in your primary residence (not a rental or vacation home).

• The tax credit applies to the cost of materials, not installation cost

Make It Make Sense – A Real Story

Tyler, April 13, 2025.

Last Month, I reviewed a window project with our client, David. David is phasing his window project, doing 2 window replacement phases on his historic home. For the first phase, we are replacing 9 windows. David did A LOT of due diligence by having 5 window “professionals” visit his home to provide him with recommendation and pricing.

I always like to ask my clients, “what do you know about windows,” in order to gauge the type of conversation we are about to have. If its “nothing,” we will start from step one discussing installation process, type, window options, longevity, expectations, samples, ETC. In this case, David already had a good grasp on what to expect with new windows, or so we thought!

After grabbing measurements, and inspecting the condition of the windows, we sit down to review options. Here, before designing a window, I ask these three questions:

“How long do you plan to stay in this home?”

      David’s Response: “Quite some time, we are looking for a good quality product at a good value”

“What type of HVAC System do you have?”

      David’s Response: “Propane with electric heat supplements”

“Did anyone talk to you about the 25c tax credit?”

       David’s Response: “No, not one!”

So, I explained the 25c Energy Star tax credit. For David’s high quality vinyl windows, this was achievable by designing the glass package with triple pane glass, instead of double pane.

“So what does the upgrade cost,” David asked. 

“Well, David, this is almost a no brain-er,” I replied

The upgrade turned out to be $720 more, for 9 windows. Essentially, after the $600 tax credit, you are getting 9 windows that insulate 35% better for only $120 more; a no brain-er for better comfort, and an investment that will pay for itself within a year. Plus, David made it known that his Cooling cost were more than heating, so we designed the glass to have UV protection, plus Low-E. This is to reduce Heat gain in the summer. If David had Higher heating costs, we would have balanced the solar heat gain with a single Low-E coating, while still being able to claim the 25c tax credit. This would allow some heat to pass through the glass in the winter, maximizing ROI.

If you have 5 window replacements, you can sometimes get more money back from the tax credit than the triple pane upgrade costs!

I always encourage my clients to compare us to other replacement companies, because yes, there is a difference!

There are MANY companies in our area that spend more time training their sales people on sales tactics rather than industry and product knowledge. They rarely Listen to your needs and help you pick a product that suits your situation the best, because they simply don’t know how! If you meet me to talk window replacement, I have big ears. My goal is to listen, provide a comprehensive approach to product recommendations, and execute any project with integrity.

Tyler