Green Energy Credits Are Going Away
Most of the clean energy tax credits from the Inflation Reduction Act are being eliminated:
Energy Efficient Home Improvement Credit:
- Gone after: December 31, 2025
- What you’re losing: 30% credit on qualifying home improvements, up to $1,200 per year
- Affected items: Insulation, windows, doors, HVAC systems, water heaters
Residential Clean Energy Credit:
- Gone after: December 31, 2025
- What you’re losing: 30% credit for solar panels, fuel cells, small wind energy, geothermal heat pumps
Clean Vehicle Credits:
- Gone after: September 30, 2025 (earlier than others)
- What you’re losing: Up to $7,500 for new clean vehicles, $4,000 for used ones
Family Credits Get Better
Child and Dependent Care Credit:
- Enhanced: Credit rate permanently increases from 35% to 50% of qualifying expenses
- What this means: Bigger tax savings for working families with childcare costs
Adoption Credit:
- New feature: Up to $5,000 is now refundable
- Previous rule: Credit could only reduce your tax to zero
- Benefit: Families with lower tax liability can now get refunds for adoption expenses
Credits That Expired
Work Opportunity Tax Credit:
- Status: Expired December 31, 2025 (OBBBA didn’t extend it)
- Impact: Employers lose this incentive for hiring from targeted groups
Health Insurance Premium Credit Changes
The Premium Tax Credit for marketplace health insurance is getting tightened up between 2026-2034:
- Stricter eligibility requirements
- More verification required
- Limited special enrollment periods
- All excess advance credits must be repaid
Potential impact: Higher premiums for many people, and some might lose coverage due to affordability.
Time-Sensitive Planning Needed
The elimination of green energy credits creates real urgency. If you’re considering energy improvements or a clean vehicle purchase:
- Solar installations: Must be completed by December 31, 2025
- Clean vehicle purchases: Must happen by September 30, 2025
- Home energy improvements: December 31, 2025 deadline
For families, the enhanced childcare credit provides significant savings – just make sure you’re documenting all qualifying expenses. If you’re adopting, understand how the new refundable portion works.
The health insurance changes starting in 2026 might affect your coverage costs, so it’s worth reviewing your marketplace options and budgeting for potential premium increases.
