Income tax credits that expire in 2025

Under the recently enacted “One Big, Beautiful, Bill Act,” (OBBBA) the federal tax credit for new and used electric vehicles (EVs) is set to expire. Do you want an electric vehicle? You must act by Sept. 30.

This means that to be eligible for the credit of up to $7,500 for a new EV or $4,000 for a used EV, you must purchase and take delivery of the vehicle before this deadline.

If you are considering solar panels or other renewable energy upgrades, you have until Dec. 31 to take full advantage of the 30-percent Residential Clean Energy Credit (RCEC). The qualified clean energy systems include:

• Solar electric panels

• Solar water heaters

• Geothermal heat pumps

• Small wind energy systems

Eligible properties include primary and secondary residences, as well as rentals occupied by the taxpayer. Landlords who do not reside in the property are not eligible.

Under the new “OBBBA” allows homeowners to claim $3,200 in 2025 tax credits for energy-efficient improvements, but only if those improvements are placed in service on or before Dec. 31.

There are two key credits to know about:

1. Up to $1,200/year for energy improvements to your primary residence, including:

• Exterior doors(up to $500 total)

• Windows and skylights (up to $600)

• Insulation and air sealing materials

• Energy-efficient furnaces, boilers, water heaters, air conditioners, and electric panels

2. Up to $2,000/year for advanced systems installed in either your main or second home:

• Electric or natural gas heat pumps

• Electric or natural gas heat pump water heaters

•  Biomass stoves and boilers

Act now! You must place your system in service by Dec. 31.

Barry Lisak is an IRS enrolled agent specializing in personal and small business taxes for 30 years. Any questions can be directed to him at 516-829-7283, or mrbarrytax@aol.com.