Need to Know Tax › Follow-up: what changed in 2025 and still applies
Credits that ended
Energy credits that ended
No more federal credits for electric cars bought after September 30, 2025, or for solar, windows, doors, furnaces and heat pumps after December 31, 2025. What still carries forward, what the date on the paperwork decides, and what Colorado still offers.
The big federal credits for electric cars and home energy upgrades are gone. If you bought or installed in time, you could still claim them on your 2025 return, and if you missed it, you still can. For anything after the cutoff, there is no federal credit. The cutoffs came in two waves, and each one uses a different test for what “in time” means.
| Credit | Last date | The test |
|---|---|---|
| New EV, up to $7,500 | Sept 30, 2025 | Written contract and a payment |
| Used EV, up to $4,000 | Sept 30, 2025 | Written contract and a payment |
| Commercial EV (behind lease deals) | Sept 30, 2025 | Acquired by the lessor |
| Home improvements, up to $3,200 a year | Dec 31, 2025 | Placed in service (installed and working) |
| Solar, batteries, geothermal, 30% | Dec 31, 2025 | Installation complete |
| Builder’s credit for new efficient homes | June 30, 2026 | Home acquired |
Electric vehicles: after September 30, 2025
The $7,500 new EV credit, the $4,000 used EV credit, and the commercial credit behind the EV lease deals all ended for vehicles acquired after September 30, 2025. “Acquired” means a written binding contract and a payment, even a small deposit or a trade-in, by that date. Delivery could come later. If you signed and paid on or before September 30, the credit belongs on your 2025 return, even if the car arrived in October. If both the contract and the first payment happened in October, there is no federal credit.
Most buyers in 2025 transferred the credit to the dealer at purchase for an instant discount. That transfer still has to be reported on the 2025 return on Form 8936, and the income limits still apply: a buyer whose 2025 income turned out above $150,000 single or $300,000 joint (and above those limits in 2024 as well) has to pay the transferred credit back with the return.
Windows, doors, furnaces, heat pumps: after December 31, 2025
The energy efficient home improvement credit, worth up to $3,200 a year, does not apply to anything placed in service in 2026: insulation, windows, doors, central air, furnaces, water heaters, heat pumps and home energy audits. “Placed in service” means installed and working, not ordered or paid for. A furnace bought in December 2025 and installed in January 2026 misses the credit.
Solar, batteries, geothermal: after December 31, 2025
The 30% residential clean energy credit ended for expenditures made after 2025, and the IRS treats the expense as made when installation is complete. A December deposit on a system finished in January does not qualify. This one catches people, because solar contracts are often signed months before the panels go up, and installers ran months behind in late 2025.
Worked example: three solar contracts, one credit
| Contract signed | Deposit paid | Installation complete | Federal credit | |
|---|---|---|---|---|
| Household A | June 2025 | June 2025 | November 2025 | 30% of $28,000 = $8,400 |
| Household B | August 2025 | August 2025 | January 12, 2026 | $0 |
| Household C | September 2025 | September 2025 | December 29, 2025 (inspection in January) | $8,400 (verify: completion vs. inspection) |
Household B is the painful one: same system, same price, two weeks late, $8,400 gone. The EV rule is the opposite (contract and payment decide, delivery does not), which is why people assume solar works the same way. If A’s 2025 tax was only $5,000, the other $3,400 carries forward to 2026 and beyond.
What’s left
An unused solar credit from 2025 or earlier still carries forward to 2026 and later returns, so don’t lose track of it. The credit was never refundable; if it was larger than your tax in the year you installed, the rest carried forward, and it keeps carrying forward until it is used up. People who change preparers sometimes lose the carryover because nobody looked at the prior year’s form.
The builder’s credit for new energy efficient homes ended June 30, 2026. Colorado still has some credits of its own, including a smaller EV credit of $750 for 2026.
Behind the scenes
When a client mentions solar, a preparer pulls the prior year’s Form 5695 and look at the last line, the carryforward. A system installed in 2024 whose 30% credit was larger than that year’s tax left a balance to carry into 2025, and possibly into 2026. The software won’t know about it unless the prior return was imported or the number was typed in, which is why the prior-year return is on every organizer’s checklist. The same goes for an EV credit transferred to a dealer: the return has to report it or the IRS assumes it was never claimed properly.
If you missed it on your 2025 return
If you bought a qualifying EV before the cutoff, or installed qualifying equipment in 2025, and the credit is not on your 2025 return, an amended return can usually claim it within three years of filing. Bring the purchase contract, the installer’s invoice showing the completion date, and for a vehicle, the seller’s report with the VIN. The date on the paperwork is the whole case: a contract dated October 2, or an installation signed off in January, is a credit that was never available, and no amended return will change that.
The Colorado side
Colorado’s own EV credit survives the federal one, at a reduced $750 for a new EV bought or leased in 2026, down from $3,500 in 2025 (which carried a further $2,500 for vehicles under $35,000). Most buyers assign it to the dealer at purchase on Form DR 0618 for an instant discount; otherwise it is claimed on DR 0617. Colorado’s heat pump and e-bike credits were also cut in half for 2026 by the same revenue trigger. The federal solar carryforward has no Colorado counterpart; the state credit for solar ended years ago.
What to bring your preparer
- Last year’s Form 5695, or the whole 2024 and 2025 returns, for any carryforward
- For an EV: the purchase contract with its date, proof of the first payment or deposit, the seller’s report (Form 15400) with the VIN, and whether the credit was transferred to the dealer
- For solar or batteries: the contract, the paid invoice, and the installer’s completion or commissioning date
- For windows, doors, furnaces or heat pumps installed in 2025: the invoice showing the installation date and the manufacturer’s certification
- For a 2026 Colorado EV purchase: the dealer’s DR 0618 if the credit was assigned
Questions people ask
I ordered an EV in September 2025 and it was delivered in November. Do I get the credit?
If you had a written contract and made a payment, even a deposit, by September 30, yes, on the 2025 return. A reservation with a refundable deposit that was not a binding contract probably does not count; the paperwork decides.
My solar credit was bigger than my tax. Is the rest lost?
No. It carries forward year after year until it is used. Make sure each year’s return shows the carryforward on Form 5695.
I leased an EV in 2026. Is there anything?
Not federally. Colorado’s $750 credit applies to leases as well as purchases, usually taken as a discount at signing.
Can I still get a credit for a new furnace or heat pump in 2026?
Not from the IRS. Check Xcel or your utility for rebates, and Colorado’s heat pump credit, which is smaller than it was but still exists for 2026.
The date on the paperwork is the whole case
A contract dated October 2 or an installation signed off in January is a credit that was never available. A contract dated September 29 with a deposit is one that still can be claimed, on an amended 2025 return if it was missed.