Energy Tax Credits for Home Improvements Are Gone in 2026: What Cleveland Homeowners Need to Know | CLE Remodeling Co.

If you're planning a kitchen remodel, a whole-house renovation, or a new addition in Cleveland this year, you may be assuming there's still a federal tax credit waiting for you at the end of it. A lot of homeowners are. The Energy Efficient Home Improvement Credit was a fixture of remodeling advice for three years, and plenty of articles, contractor websites, and even some tax software still reference it as if it's active.

It isn't. As of January 1, 2026, the federal tax credit that covered new windows, insulation, doors, and efficient HVAC systems is gone. Here's what actually changed, what (if anything) has replaced it in Ohio, and what it means for how you budget a remodel this year.

The Tax Credit Homeowners Keep Assuming Still Exists

For projects placed in service between 2023 and 2025, the Energy Efficient Home Improvement Credit (IRS Section 25C) let homeowners claim 30% of the cost of qualifying upgrades up to $1,200 a year for things like whole-house renovation envelope work (windows, doors, insulation), and up to $2,000 a year separately for heat pumps and heat pump water heaters. Its companion, the Residential Clean Energy Credit (Section 25D), covered solar, battery storage, and geothermal at 30% with no annual cap.

Both credits were repealed early. The One Big Beautiful Bill Act (Public Law 119-21), signed July 4, 2025, moved up the expiration date for both credits from their original 2032/2033 sunset to December 31, 2025 — seven years earlier than planned.

What Section 25C and 25D Actually Covered — and When They Ended

Per the IRS's own guidance on the law change, neither credit is allowed for property placed in service after December 31, 2025:

• Section 25C (Energy Efficient Home Improvement Credit): covered windows, exterior doors, insulation, air sealing, qualifying central air conditioners, water heaters, and home energy audits. Terminated for property placed in service after 12/31/2025.
• Section 25D (Residential Clean Energy Credit): covered solar panels, solar water heating, geothermal heat pumps, and battery storage. Terminated for expenditures made after 12/31/2025.

Practically, that means a window replacement, insulation job, or heat pump installed anywhere in 2026 including here in Cuyahoga County no longer qualifies for either credit, no matter how efficient the equipment is.

If You Finished a Project by December 31, 2025, You May Still Qualify

One exception worth knowing: if your project was completed and the equipment was placed in service by December 31, 2025, you can still claim the credit on your 2025 tax return (the one filed in 2026) using IRS Form 5695. This only applies to work that was actually finished last year — a signed contract or a deposit in 2025 for work completed in 2026 does not qualify. If that's your situation, that's a conversation for your tax preparer, not your contractor.

Ohio's Federal Rebate Programs Are Still Not Live

Separately from the tax credits, Ohio was awarded roughly $249 million in Inflation Reduction Act funding for two point-of-sale rebate programs: the Home Efficiency Rebates (HOMES) and the Home Electrification and Appliance Rebates (HEAR/HEEHRA). Unlike the tax credits, these would show up as an upfront discount, not something you claim in April.

The Ohio Department of Development's own program page confirms the state is still developing the program and was, as of its last posted update, awaiting U.S. Department of Energy approval of its application with no committed launch date. Independent tracking of state rollout as of mid-2026 likewise reports Ohio's HOMES and HEAR programs have not opened for applications. If you're being told by a contractor or salesperson that you can apply for a specific rebate amount today, verify it directly with the Ohio Department of Development before you sign anything the state's own site is the only place to confirm current status.

The One State Program Still Standing: ECO-Link

The Ohio Treasurer's office has long administered ECO-Link, a linked-deposit program that isn't a rebate or a credit but a reduced-rate loan: eligible homeowners can get up to a 3% interest rate reduction on a new or existing home improvement loan of up to $50,000, for a 5- or 7-year term, through a participating bank. It has historically covered a broad range of projects remodeling, roofing, siding, HVAC replacement, and more not just narrow energy-efficiency upgrades. Because program funding and participation can shift year to year, confirm current availability and participating lenders directly with the Ohio Treasurer's office before counting on it in your budget.

Check With Your Utility Before You Assume There's Nothing Left

Local utilities are a separate track from federal and state programs, and rebate availability changes without notice FirstEnergy (parent company of Cleveland's Illuminating Company) says as much on its own energy-savings page. If you're planning an home addition or a full system replacement, it's worth a five-minute call to your utility before you finalize equipment choices, since a rebate on an efficient furnace or water heater can still change which option makes financial sense.

What This Means for Budgeting Your Cleveland Remodel in 2026

The bottom line: don't build a federal tax credit into your 2026 remodeling budget. It's not there anymore, and treating it as a given is the fastest way to end up a few thousand dollars short at closeout. A few practical adjustments:

• If your project includes kitchen remodel or bathroom remodel work with new windows or major electrical or HVAC changes, price the full cost without assuming a credit will offset it see our breakdown of what a home addition actually costs in Cleveland for a sense of how these numbers add up.
• If you were counting on Ohio's HOMES or HEAR rebate to fund part of a basement remodel, treat it as a maybe, not a line item our guide to basement finishing costs in Cleveland is priced without assuming any rebate.
• ECO-Link is worth a phone call if you're financing the project through a bank loan anyway; it costs nothing to ask.
• Before you get too far into planning, it's also worth checking whether your remodel needs a permit in your municipality, since permit timing and cost are a bigger, more predictable budget factor than any of the programs above.

We walk every homeowner through a transparent, itemized estimate before work starts, precisely so surprises like an expired tax credit don't show up after the fact. Whether you're just starting to think about planning a kitchen remodel or you're ready to talk numbers on a full addition, we'd rather have this conversation with you now than after a contract is signed.

Frequently Asked Questions

Ready to plan your project around real numbers instead of an expired tax credit? Get a free, transparent estimate from CLE Remodeling Co., or take a look at our completed Cleveland projects to see the kind of work we do.