For taxpayers hoping to claim certain energy credits and deductions, the clock is ticking. Last week, the Internal Revenue Service ("IRS") issued Fact Sheet 2025-05 with frequently asked questions ("FAQs") relating to the accelerated expiration of certain energy credits under the One, Big, Beautiful Bill Act ("OBBB").
The new termination dates of these credits and deductions found in the Internal Revenue Code ("IRC") are as follows:
| IRC Code | Section Title | Termination Date |
| 25C | Energy efficient home improvement credit | The credit will not be allowed for any property placed in service after December 31, 2025. |
| 25D | Residential clean energy credit | The credit will not be allowed for any expenditures made after December 31, 2025. |
| 25E | Previously-owned clean vehicles credit | The credit will not be allowed with respect to any vehicle acquired after September 30, 2025. |
| 30C | Alternative fuel vehicle refueling property credit | The credit will not be allowed for any property placed in service after June 30, 2026. |
| 30D | New clean vehicle credit | The credit will not be allowed for any vehicle acquired after September 30, 2025. |
| 45L | New energy efficient home credit | The credit will not be allowed for any qualified new energy efficient home acquired after June 30, 2026. |
| 45W | Qualified commercial clean vehicle credit | The credit will not be allowed for any vehicle acquired after September 30, 2025. |
| 179D | Energy efficient commercial buildings deduction | The deduction will not be allowed with respect to any property the construction of which begins after June 30, 2026. |
For the purpose of IRC Sections 25E, 30D, and 45W, a vehicle is considered to be "acquired" as of the date a written binding contract is entered into and a payment has been made. A payment includes a down payment or a vehicle trade-in. In order to claim a credit under IRC Sections 25E, 30D, or 45W, acquiring a vehicle prior to the termination date is an initial step. But that alone does not entitle the taxpayer to a credit. A vehicle must also be "placed in service" to claim the credit. If a taxpayer acquires a vehicle, under the definition above, on or before September 30, 2025, then the taxpayer will be entitled to claim the credit when they place the vehicle in service even if it is placed in service after September 30, 2025.
Further, for purposes of the residential clean energy credit under IRC Section 25D, a credit cannot be claimed for property installed or constructed after December 31, 2025. Under Section 25D(e)(8)(A), an expenditure with respect to an item is treated as made when the original installation of the item is completed. If that installation is completed after December 31, 2025, the expenditure will be treated as made after December 31, 2025 and that taxpayer will be prevented from claiming the IRC Section 25D credit. Under Section 25D(e)(8)(B), an expenditure made in connection with the construction or reconstruction of a structure will be treated as made when the original use of the constructed or reconstructed structure by the taxpayer begins. If the construction or reconstruction is completed and the taxpayer's original use of the structure begins after December 31, the expenditure will be treated as having been made after December 31, 2025 and the taxpayer will be prevented from claiming the Section 25D credit.
Please note, the IRS's FAQs are issued to provide general information to taxpayers and tax professionals as expeditiously as possible. They do not address specific taxpayer facts and circumstances and are subject to modification and update by the IRS. Further, they are not published in the Internal Revenue Bulletin and will not be used by the IRS to resolve a case. Instead, if there is a question as to how an FAQ applies to an individual taxpayer's case, the law, not the FAQ, will control.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
