Expiring Credits and Deductions

• Energy efficient home improvement credit (Section 25C) will not be allowed for any property placed in service after December 31, 2025
• Residential clean energy credit (Section 25D) will not be allowed for any expenditures made after December 31, 2025
• Previously-owned clean vehicles credit (Section 25E), New clean vehicle credit (Section 30D), and Qualified commercial clean vehicle credit (Section 45W) will not be allowed for any vehicle acquired after September 30, 2025
• Alternative fuel vehicle refueling property credit (Section 30C) will not be allowed for any property placed in service after June 30, 2026

What “Acquired” Means for Vehicles

• For clean vehicle credits, a vehicle is “acquired” as of the date a written binding contract is entered into, and a payment has been made
• A payment includes a nominal down payment or a vehicle trade-in
• Acquisition alone does not immediately entitle a taxpayer to a credit; the vehicle must also be “placed in service” to claim the credit
• If a vehicle is acquired by a written binding contract and a payment on or before September 30, 2025, the taxpayer can still claim the credit when they take possession of the vehicle, even if possession occurs after September 30, 2025

Credit Transfer and the Online Portal

• Taxpayers should wait until the time of sale, which is when they take possession of the vehicle, to make the credit transfer election.
• New user registration for the Clean Vehicle Credit program through the Energy Credits Online portal will close on September 30, 2025
• The portal will remain open beyond September 30, 2025, for previously registered users to submit and update time of sale reports

Requirements for Other Credits

• For the Energy Efficient Home Improvement Credit (Section 25C), qualified manufacturers are no longer required to make periodic written reports to the IRS.
• For the Residential clean energy credit (Section 25D), an expenditure is treated as made when the original installation of the item is completed
• If installation is completed after December 31, 2025, the expenditure is treated as made after that date, preventing the taxpayer from claiming the credit
• In the case of construction or reconstruction of a structure, the expenditure is treated as made when the taxpayer’s original use of the structure begins

Navigating these new deadlines can be complex, and our team at PSACPA is here to help you understand how these changes may impact your tax planning. We can provide the expert guidance you need to make informed decisions and secure your eligible tax benefits before they expire!

Give us a call and start building a smarter financial future for your startup.
(301)-879-0600 or email contact@psacpa.com