25C Tax Credit Information for Homeowners
Get More Out of Your Insulation Upgrades

Did you know that you could save up to $1,200 per year on insulation upgrades through a federal tax credit? The Energy Efficient Home Improvement Credit, sometimes called the 25C Tax Credit, makes it easier for homeowners to afford insulation improvements.

How the 25C Tax Credit Works:

30% Credit on Costs – Homeowners can receive a federal tax credit equal to 30% of the total cost of qualifying insulation and air sealing upgrades, with an annual limit of $1,200.

Covers All Major Insulation Types – Whether you’re adding insulation to your attic, walls, basement, or crawl space, you can qualify as long as the materials meet efficiency standards.

Can Be Combined with Other Rebates – Many local utilities and energy efficiency programs offer additional rebates and incentives, which can be stacked with the federal tax credit for even greater savings.

Separate from Heat Pump Tax Credits – The 25C Tax Credit for insulation is in a different category than the heat pump tax credit ($2,000 max credit annually), meaning homeowners can claim both in the same year for up to $3,200 in total tax credit savings.

How to Claim Your Tax Credit:

1. Verify Eligibility Work with a qualified insulation contractor to ensure your upgrades meet the requirements.

2. Keep Your Documentation. Save all the receipts and invoices detailing your insulation installation costs.

3. File IRS Form 5695. When filing your taxes, claim the insulation tax credit using IRS Form 5695 or consult a tax professional.

Want to maximize your energy savings? Contact a professional ICAA Qualified Insulation Contractor to ensure your home upgrades deliver long-term efficiency benefits and qualify for incentives like the 25C Tax Credit.