Homeowners who install energy-efficient improvements in their primary residence located in the US are eligible for the 25C Tax Credit. This credit applies to existing homes only and not to new construction or rental properties.

To claim the 25C Tax Credit, you need to file IRS Form 5695 (Residential Energy Credits) with your federal income tax return. You will need to provide details about the qualifying energy-efficient improvements you made, including the cost and the manufacturer's certification.

The 25C Tax Credit applies to a variety of energy-efficient home improvements, including:
Heating and Cooling Equipment: This includes central air conditioners, electric heat pumps, furnaces, and boilers that meet certain efficiency standards.
Water Heaters: Electric heat pump water heaters and natural gas, propane, or oil water heaters that meet certain efficiency standards.

The 25C Tax Credit is subject to a lifetime cap. As of recent updates, the maximum amount of the credit that can be claimed is 30% of the cost of the qualifying improvements, up to a maximum of $1,200 per year for most improvements and a maximum of $2,000 per year for certain heat pumps, biomass stoves, and boilers.

The energy-efficient improvements must be installed by the end of the tax year for which you are claiming the credit. For example, to claim the credit on your 2024 tax return, the improvements must be installed by December 31, 2024.