Window Replacement Tax Credit 2026: Section 25C Expired

Windows are one of the biggest sources of energy loss in American homes. The Department of Energy estimates that heat gain and loss through windows accounts for 25–30% of residential heating and cooling energy use. Replacing old single-pane or failed double-pane windows with modern efficient ones still makes a real difference — even without the federal credit, state programs and utility rebates may help offset costs.

What the Section 25C credit covered (for 2025 returns)

If you installed qualifying windows before December 31, 2025, you may still claim the Section 25C credit on your 2025 federal tax return. Here's what the credit covered:

Energy Star Most Efficient requirements (still relevant for utility rebates)

Even though the federal tax credit is gone, many utility rebate programs still require windows to meet the Energy Star Most Efficient criteria. The requirements vary by climate zone:

U-Factor measures heat loss (lower is better). SHGC (Solar Heat Gain Coefficient) measures solar heat entering through the window. In hot climates, low SHGC matters most; in cold climates, low U-Factor is paramount.

What to do instead in 2026

Without the federal tax credit, window replacement savings come from state and utility programs:

1. State energy rebate programs

Many states offer their own window rebate programs independent of federal credits. Programs vary widely — check your state energy office or the DSIRE database (dsireusa.org) by zip code. States with strong programs include Massachusetts (MassSave), California (utility-based), New York (NYSERDA), and Colorado (Xcel Energy).

2. Utility rebate programs

Your electric or gas utility may offer rebates for Energy Star Most Efficient windows as part of their efficiency portfolio. Typical amounts range from $2–$10 per window, up to $200 per household. Search your utility's website or use energystar.gov/rebate-finder.

3. Property Assessed Clean Energy (PACE) financing

PACE programs in many states let you finance energy-efficient improvements (including windows) through your property tax bill, often at below-market rates. No upfront cost, repaid over 5–25 years. Available in California, Florida, Texas, and other states.

4. Energy savings still make the case

Annual energy savings from efficient windows typically run $200–$500 depending on climate and home size. Over a 15–20 year window lifespan, that's $3,000–$10,000 in utility bill savings — often more meaningful than the now-expired tax credit was.

If you installed windows in 2025: claiming the credit on your return

The Section 25C credit is still claimable for qualifying purchases made in 2025:

1. Keep the manufacturer's certification statement and receipts
2. File IRS Form 5695 (Residential Energy Credits) with your 2025 federal tax return
3. Part II of Form 5695 covers Section 25C improvements
4. The credit reduces your 2025 tax liability dollar-for-dollar (non-refundable)

Pairing with other improvements

Windows alone won't solve a drafty house. Air sealing and insulation remain cost-effective improvements with strong utility rebate programs still available in 2026. See our insulation rebates guide and federal energy programs guide.