If you were thinking about putting solar panels on your roof, buying an electric car or making your home more energy-efficient, time is quickly running out to take advantage of federal tax breaks that could be worth thousands of dollars.
Most of those credits are getting phased out this year under the policy bill signed into law by President Trump.
Here’s what to know about the federal tax breaks and how to get them while you can. We’ve also got tips on related programs that should be sticking around for longer.
Electric vehicles
If you’re interested in an electric vehicle, you would need to buy or lease the car by Sept. 30 to claim a federal tax credit that’s worth up to $7,500 for new vehicles or $4,000 for used ones.
A critical first step is to find a car dealer that has registered with the Internal Revenue Service to claim the credit. Here’s a map of registered dealers, which can use the tax break to directly reduce the car’s purchase price at the point of sale, so that you don’t have to wait for a refund on next year’s return.
Buying New
If you’re buying a new electric vehicle, the car needs to have been made in the United States and cost less than $55,000 (or less than $80,000 for S.U.V.s and pickup trucks) to qualify for the $7,500 credit. Here’s a list of the two dozen or so eligible vehicles. The new vehicle credit is available only to individual buyers earning $150,000 or less and to couples earning $300,000 or less.
Buying Used
If you’re buying a used electric vehicle, the car must cost $25,000 or less and be at least two years old to qualify for the $4,000 credit. Here’s a list of eligible vehicles. The used vehicle credit is available to individuals earning $75,000 or less and to couples earning $150,000 or less.
Leasing
Another popular option is to lease an electric vehicle for a few years. Until Sept. 30, car companies can apply the $7,500 credit directly to electric vehicles they lease, with no restrictions on income or models. Anyone interested in leasing should check the payment calculation to make sure the dealer has applied the tax credit.
“Leasing can be a great option if you’re not sure about the technology,” said Ingrid Malmgren, senior policy director at Plug In America, a nonprofit group that promotes electric vehicles. “You’re not locked in.”
Other things to think about
If you want to install an electric vehicle charger at home, the federal tax break that can cover up to 30 percent of costs doesn’t expire until June 30, 2026. But if you need to upgrade your electrical panels to accommodate the charger, the tax break for doing so expires on Dec. 31, 2025.
Not ready to buy an electric vehicle now? Many states like California, Colorado, Illinois and New York will continue to offer their own rebates, potentially worth thousands of dollars, in the years ahead. Some electric utilities also run programs to defray charging costs.
Roughly one million used electric vehicles are also expected to come off lease over the next three years, creating a boom in the secondhand market. “We expect there will be some great deals to be had,” Ms. Malmgren said.
Rooftop solar
If you want to buy rooftop solar panels or a home battery for backup power, you’ll need to have them installed this year to claim a tax break worth 30 percent of costs. If you want to lease a system, you have more time.
Home solar systems can cost around $30,000, so start by calculating whether it’s a good investment. That means figuring out how much the panels will offset your electricity bills and whether you owe enough on your tax returns to claim the credit. Online estimates can help, but an expert assessment is crucial.
If you decide to go solar, note that the new law is ambiguous on whether you need to pay for the system by Dec. 31 or have it fully operating by then to meet the tax deadline. It’s safer not to wait until the last minute, since it can take a month or two for installers to receive the necessary approvals and for electric utilities to make any inspections or grid upgrades.
“You might only have until October or November, because of the time frames to install,” said Brett Bouchy, chief executive of Freedom Forever, one of the country’s largest residential solar installers. “So people really need to act now to make sure.”
There’s a longer window to lease a rooftop solar system, in which a third party owns the panels and the homeowner pays a monthly fee, ideally saving money on power bills. Solar leasing companies can use a different investment tax credit that won’t expire until at least the end of 2027 (and possibly longer, depending on how tax guidance from the Treasury Department shakes out).
Home energy upgrades
A separate tax credit to help make homes more energy efficient is also expiring after Dec. 31, 2025. If you want to upgrade your insulation, replace your doors or windows, swap out your furnace with an electric heat pump, or switch to a more efficient water heater, now is the time.
The Energy Efficient Home Improvement Credit covers up to 30 percent of the costs of efficiency improvements each year. The maximum you can claim is $2,000 for qualified heat pumps or water heaters, plus an additional $1,200 for certain upgrades to windows, doors or insulation that meet Energy Star or other standards. (Note that you can’t use this deduction if you don’t owe enough on your tax returns.)
These measures can lead to significant savings: In 2023, more than 2.3 million families used the credit and saved an average of $130 per year on their energy bills, according to the American Council for an Energy-Efficient Economy, a nonprofit research organization.
“If you were already looking to replace your windows anyway, these credits are a no-brainer,” said Lowell Ungar, the group’s federal policy director. “But it can also be worth bringing in an expert and looking at your home holistically, because often a combination of insulation, air sealing and other upgrades can result in the best savings.”
Heat Pumps
Electric heat pumps, in particular, have received a lot of attention as an efficient, climate-friendly way to heat and cool homes. But whether a heat pump will lower your energy bills can be complicated, experts say.
If you’re currently heating your home with fuel oil or electric resistance heat, swapping in a heat pump will usually help save money. If you need to replace your central air-conditioner anyway, it may be worthwhile to pay slightly more for a heat pump that can both cool in the summer and provide heat in the winter.
But if you heat your home with natural gas, as many Americans do, a heat pump could either increase or decrease your bills. It’s worth consulting a specialist, and if you do want a heat pump, you may need to upgrade the vents or insulation in your home to reap savings.
Note that the tax credit can also be used to defray up to $600 of the cost of buying more efficient gas-burning appliances.
This calculator and electrification planner from Rewiring America can help you figure out what upgrades might save money and what incentives might be available.
What if I miss the deadlines?
If you miss out on the clean energy and efficiency credits, it’s not the end of the story. There are other programs out there.
Congress in 2022 also provided $9 billion to states to set up two different home energy rebate programs. Republicans didn’t repeal either of those programs, which will remain in place until the money runs out.
The first program, focused on electrification, provides rebates to families making less than 150 percent of their local median income. These can be worth up to $8,000 for an electric heat pump, $1,750 for a heat pump water heater, $840 for an induction stove and $2,500 for upgrading electric wiring.
The second program, focused on efficiency, potentially provides thousands of dollars in rebates for upgrading space heating, cooling, insulation and water heaters to households making less than 80 percent of their local median income.
To date, every state but South Dakota has agreed to set up rebate programs, although only about a dozen states have them up and running so far.
Many state and local governments will also continue to offer their own incentives. In Vermont, some utilities provide rebates of up to $3,200 for electric vehicles. States like Nevada and Georgia have money for low-income households to adopt solar power. Massachusetts has a program that helps homeowners install heat pumps or efficient lighting.
You can find a list of state programs here. Rewiring America’s calculator includes more than 4,000 local incentives.
Brad Plumer is a Times reporter who covers technology and policy efforts to address global warming.
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