The federal Energy Efficient Home Improvement Credit, known as Section 25C, no longer applies to new window projects. Under the tax law signed in July 2025, the IRS states that the credit is not allowed for any property placed in service after December 31, 2025. If you are replacing windows in Austin in 2026, you can still lower the cost of the project, but the savings now come from local utility programs, smart product choices, and financing rather than a federal tax credit. This guide explains what changed and what options remain.
This page is general information, not tax advice. Talk with a tax professional about your situation before filing.
What the 25C Window Tax Credit Covered
From 2023 through 2025, homeowners could claim 30% of the cost of qualifying energy-efficient exterior windows and skylights, up to $600 per year, as part of the 25C credit. Qualifying exterior doors were eligible for up to $250 per door and $500 total. The products had to meet specific efficiency requirements, and the credit applied to your primary residence.
Many Austin homeowners timed window projects around that credit. It was a meaningful incentive, but at $600 per year for windows it covered only a small share of a typical full-home replacement.
What Changed for 2026 Window Projects
The IRS guidance ties the end of 25C to when the property is placed in service, meaning when the windows are installed and ready for use, rather than when you signed a contract or paid a deposit. Windows installed on or after January 1, 2026 do not qualify.
If your windows were installed by December 31, 2025, you may still be able to claim the credit on your 2025 return. Keep your invoice, the manufacturer's certification statement, and proof of the installation date, and review the details with your tax preparer.
Austin Energy Programs That Can Still Help
Austin Energy does not currently list a standalone rebate for replacing windows in single-family homes. It does list a rebate for solar screens, which block a large share of the sun's heat before it reaches the glass and can help on west and south-facing windows. Austin Energy also offers a Home Energy Savings program with rebates and financing for qualifying efficiency upgrades such as insulation and air sealing.
Program details, eligibility, and amounts change, so check Austin Energy's residential rebates page for current offers. If you are served by Pedernales Electric Cooperative, Georgetown Utility Systems, or another provider outside Austin Energy's territory, check that utility's programs as well.
Ways to Lower the Cost of Window Replacement in 2026
Without a federal credit, getting the most value comes down to planning. These are the approaches we recommend most often:
- Prioritize the Hottest Rooms: Starting with west and south-facing windows puts your budget where heat gain is highest.
- Choose the Right Glass Package: A low-E package with a low Solar Heat Gain Coefficient often does more for comfort in Texas than an upgraded frame.
- Match the Product to the Home: Mid-tier vinyl is the right fit for many suburban Austin homes, while fiberglass or composite makes sense for long-term homes with heavy sun exposure.
- Use Insert Installation When Frames Are Sound: A retrofit installation costs less than full-frame replacement when the existing frame is dry and square.
- Replace in One Project: Full-home projects usually cost less per window because setup and labor are shared.
Financing Options for Window Replacement
JP Exteriors offers two financing programs for window projects. A long-term fixed option at 6.99% APR over 180 months keeps monthly payments low on larger projects. A promotional option at 0% APR for 18 months works well if you plan to pay the balance in full within that window. You can learn more on our home improvement financing page.
Are Energy-Efficient Windows Still Worth It Without the Credit
For most Austin homeowners, yes. The tax credit was capped at $600 per year for windows, so it was never the main reason to replace them. The bigger benefits are lower cooling costs, fewer hot spots, less outside noise, and an end to fogged glass and failing frames. In our experience, replacing original single-pane or early double-pane windows with modern low-E windows often makes a noticeable difference in summer comfort and cooling bills.
To see what a project would cost for your home, review our 2026 window replacement cost guide or read about our window replacement services in Austin.
Frequently Asked Questions About Window Tax Credits
Can I still claim a federal tax credit for windows in 2026? No. According to the IRS, the 25C credit does not apply to property placed in service after December 31, 2025.
I paid a deposit in 2025 but the windows were installed in 2026. Do I qualify? The IRS ties eligibility to the placed-in-service date, which is generally the installation date. Ask your tax professional to review your specific case.
Does Austin Energy offer a window rebate? Austin Energy does not currently list a standalone single-family window replacement rebate, but it does list a solar screen rebate and other efficiency programs. Check its site for current details.
Do I need a permit to replace windows? It depends on the city. Round Rock, for example, does not require a permit for window replacement as long as the work meets code. We confirm local requirements before installation.
Get a Clear Window Replacement Plan for Your Home
Incentives change, but the value of well-chosen, well-installed windows does not. We will measure your home, explain which windows are worth replacing first, and give you a written proposal with product, glass, and financing options. Request your free consultation with JP Exteriors to get started.
