Insulation Tax Credit in 2026: Section 25C Has Ended

Updated September 13, 2026: New insulation installed in 2026 does not qualify for the federal Energy Efficient Home Improvement Credit (Section 25C).

What changed?

The IRS states that the credit is unavailable for expenditures or property placed in service after December 31, 2025. The earlier claim on this page that insulation installed in 2026 could qualify through 2032 was incorrect and has been removed.

Read the IRS 2025 Instructions for Form 5695, including the termination notice on page 1.

What if the insulation was installed in 2025?

A qualifying 2025 installation may be relevant to a 2025 tax return filed in 2026. The filing year does not make a new 2026 installation eligible. Keep the invoice, installation date and product records, and have a qualified tax preparer review the rules that apply to that earlier project.

For insulation, the historical credit was based on eligible material costs. Installation labor was excluded. This corrects the earlier statement on this page that both materials and labor qualified.

Planning an insulation project now

Compare written quotes using the actual project scope and price, without subtracting a Section 25C credit. Any separate utility rebate must be confirmed directly with the utility, including current eligibility and participating-contractor requirements.

Ideal Insulation can provide an estimate for spray foam, blown-in insulation, batt insulation or insulation removal. Discuss materials, existing conditions and the intended work before choosing a system.

Request an insulation estimate or call (239) 455-2002.

This page provides general information, not individual tax advice.