If you suspect your home may be under-insulated, now is the time to find out. New federal legislation means the insulation tax credit worth up to $1,200 is ending sooner than expected—and the clock is ticking.
What is it?
The Energy Efficient Home Improvement Credit, commonly referred to as the insulation tax credit, was originally set to run through 2032. However, this credit has been eliminated after the 2025 tax year as part of the One Big Beautiful Bill, signed into law on July 4. The Energy Efficient Home Improvement Credit will now expire on December 31, 2025.
How can I qualify for the insulation tax credit?
To qualify, your insulation project must be completed (not just scheduled) by the end of this year so that you can claim the credit when you file your 2025 taxes. Any weatherization work finished after December 31 will not be eligible.
What’s at stake?
The Energy Efficient Home Improvement Credit offers up to $1,200 in federal tax credit savings. This is a dollar-for-dollar credit on your federal tax return. So, if you owe taxes, it directly reduces the amount you owe—but only if your insulation work is finished before 2026.
The Energy Efficient Home Improvement Credit helps offset the cost of insulation and air sealing upgrades, also known as weatherization. These improvements don’t just lower your energy use, they also:
- Improve home comfort by creating more even temperatures room-to-room
- Reduce strain on your HVAC system
- Lower monthly heating/cooling expenses
- Boost indoor air quality
Read more on the Homeworks Energy website and sign up fr a free home energy assessment to learn if your home can benefit from weatherization.