Don’t Miss Out: 2025 Is the Last Year for the Insulation and Heat Pump Tax Credit
Making energy-efficient improvements to your New York or Connecticut home has never been more urgent, or more affordable. The Inflation Reduction Act (IRA), passed in 2022, set aside nearly $370 billion to fight climate change and help families lower energy bills. But one of its most powerful incentives , the Energy Efficient Home Improvement Tax Credit (25C), is scheduled to expire after December 31, 2025.
That means this is your final chance to claim thousands of dollars back on the improvements you’ve been putting off. If you’ve been thinking about upgrading your insulation, installing a heat pump, or improving your home’s comfort and efficiency, 2025 is the year to act before this credit disappears.
Healthy Home Energy & Consulting can help you maximize your savings with services like insulation, air sealing, and heat pump installation, all eligible for these tax credits.
The Expiring 25C Tax Credit
The Energy Efficient Home Improvement Tax Credit (known as Section 25C) was revived and improved under the IRA. But unless Congress acts, it ends after 2025. Here’s how it works:
30% of project costs covered, up to $3,200 per year
Split into two categories:
Up to $2,000 for heat pumps, ductless mini splits, and heat pump water heaters
Up to $1,200 for insulation, air sealing, energy audits, panel upgrades, windows, and doors
This credit goes straight toward lowering your taxes, giving homeowners one of the best chances to save. But it won’t be here forever.
How to Claim It:
When filing your taxes, submit IRS Form 5695 for the year your improvements were completed. Healthy Home Energy & Consulting is happy to provide you with an itemized receipt for work performed. We recommend that you work with a tax professional to ensure that your tax credit is calculated and submitted correctly.
Inflation Reduction Act Rebates
Alongside the 25C tax credit, the IRA introduced new rebate programs—though these will roll out on different timelines depending on your state.
New York Rebates (Available Now)
In 2024, New York expanded its EmPower+ program with IRA funding, offering significant rebates for low- and moderate-income households:
$1,600 for air sealing, insulation, and ventilation
$2,500 for electrical wiring upgrades
$4,000 for electrical panel upgrades
$1,750 for heat pump water heater installation
$8,000 for heat pump installation
Multi-family buildings can also qualify for up to $8,000 in Home Efficiency Rebates for projects that reduce energy usage by at least 20%.
Connecticut Rebates (Coming Soon)
Connecticut’s IRA rebate programs are expected to begin by 2026, though recent legislation may change the rollout.
Rebates for Multi-Family High Efficiency Upgrade
For upgrades that are improving the efficiency and comfort of multi-family buildings, there are Home Efficiency Rebates up to $8,000 for a measured reduction in energy usage of at least 20%.
Both rebate programs in Connecticut stemming from the IRA have been slated to go into effect by early 2026, however, recent legislation changes are likely to alter the rollout.
Start the Process with a Whole Home Evaluation
Energy audits are a prerequisite to be eligible for IRA rebates, but they’re also a beneficial first step to making home efficiency improvements.
During a Whole Home Evaluation, our team will conduct a thorough analysis of your home’s current performance. We’ll use specialized tools and our building science expertise to diagnose issues, identify areas in need of upgrades, and build a customized plan of action. From there, we’ll make recommendations tailored to your needs that can improve comfort, lower your energy bills, and turn your house into a Healthy Home.
Get started with a Whole Home Evaluation today. Call 914-293-5884 or contact us online to get started.
Act now! Save up to $3,200 on home upgrades!
Call Healthy Home today about IRA incentives!
914-242-9733