The window and door tax credit's last month: what to say

For three years the federal energy efficient home improvement credit, section 25C, has been an easy line in window and door advertising. That ends this month. The IRS fact sheet published on August 21, after the July 4 tax law, puts it in one sentence: the credit will not be allowed for any property placed in service after December 31, 2025. ENERGY STAR’s own credit page says the same thing in shopping terms: products purchased and installed between January 1, 2023 and December 31, 2025.

So December is a deadline month, and a risky one. Homeowners will call because an ad told them it is their last chance, and only some of those ads will be true. Here is how to keep yours honest.

The deadline is the install date, not the signature

The IRS test is when a window is placed in service. ENERGY STAR spells it out as purchased and installed. Neither says signed, ordered or deposited. A homeowner who signs on December 10 for windows installed in late January has bought nothing the credit covers.

Many replacement units are made to measure, and every window company knows its own lead time from signed contract to install day. If that gap is longer than the weeks left in the month, a “last chance for the tax credit” ad is selling something you cannot deliver. In the accounts we look at, the honest version is narrower:

• Limit the credit line to stock you can install this month. If you have units on hand or a short-lead product, say so plainly, with a firm install date.
• Put the install date on the quote. If it falls after December 31, the credit line comes off that quote.
• Train whoever answers the phone. The first question from a December caller will be about the credit, and the answer has to match the calendar, not the ad.

What the credit was ever worth

Ads that lean on “tax savings” tend to oversell it, and December is when that gap turns into an angry review. The IRS rules for 25C were tight:

• The credit is 30% of qualified expenses, but exterior windows and skylights are capped at $600 for the year in total, however many windows go in.
• Exterior doors are capped at $250 per door and $500 in total.
• Labor costs for installing building envelope components do not qualify. Only the product counts.
• Windows had to meet ENERGY STAR Most Efficient requirements, not just ordinary certification. Doors had to meet the applicable ENERGY STAR requirements.

The Most Efficient bar for 2025 is specific. The criteria call for a U-factor of 0.20 or lower in the Northern zone, with a solar heat gain coefficient of at least 0.20, and in the Southern zone a U-factor of 0.21 or lower with solar heat gain of 0.23 or lower. A window that carries an ENERGY STAR label is not automatically Most Efficient. If a homeowner is buying for the credit, the product on the quote has to clear that bar.

A full-house window job and two new entry doors could, at most, return $600 plus $500 from the credit. That is worth having. It is not “thousands back from the government”, and an ad that implies otherwise is a claim you would have to defend.

Paperwork to finish before December 31

The 2025 rules added a step that catches companies out. For each item placed in service in 2025, the IRS says no credit is allowed unless the item was produced by a qualified manufacturer and the taxpayer reports its Qualified Manufacturer Identification Number, the QMID, on the return. Your customers cannot report a number they were never given.

Before the month closes, check that every 2025 invoice for a qualifying window or door shows:

• The manufacturer’s QMID for each item, or a clear note of where the homeowner can find it.
• Product cost separated from labor, since labor does not count.
• Evidence that windows meet Most Efficient and doors meet the applicable ENERGY STAR requirements.
• The date the job was completed.

A customer who files in the spring and finds a number missing will call you, not the IRS.

January 1: what comes out

The day after the deadline, every mention of a federal window or door credit becomes out of date. That includes more places than the ads themselves:

• Search ad headlines, descriptions, callouts and sitelinks.
• Landing pages, financing pages and any “savings” calculator on your site.
• Business Profile posts and offers, and the description on your profile.
• Email and text sequences still sending to old quotes.
• Sales sheets, in-home presentation slides and the phone script.
• Your listings on lead sites and home show materials.

Search leads in this trade are too expensive to spend on buyers expecting money that no longer exists. LocaliQ’s 2025 home services benchmarks, covering April 2024 to March 2025, put the median cost per lead for Doors & Windows Sales at $200.34, the second highest of the 16 home service categories it measured. Paying that for a caller who hangs up at the word January is the worst kind of spend.

If a state or utility program applies where you work, it can replace the federal line, but only once you have its current terms in writing and have checked them against the products you actually sell.

What to sell in January instead

The demand does not go away with the credit. The Energy Information Administration counts October through March as the winter heating season, so January is when drafts, cold rooms and condensation are most noticeable. Those are your reasons to call.

What you should not do is replace the credit headline with a savings percentage. In February 2012 the FTC settled with five replacement window companies over claims such as a “40% Energy Savings Pledge” and “50% Energy Savings Guaranteed”. The orders said an “up to” savings claim needs evidence that all or almost all consumers are likely to reach the maximum.

ENERGY STAR’s own numbers are the safe ceiling. It says certified windows lower household energy bills by an average of 12%, and it adds that new windows may not pay for themselves in energy savings alone, pointing instead to comfort and a higher home value. Quote that, with the wording intact, or sell the comfort and the certified ratings, which you can show.

What we are telling clients

• Audit every December ad that mentions the credit, and narrow it to jobs you can install by December 31.
• Add the install date and the QMID to every quote and invoice issued this month.
• Brief the people answering the phone on the placed-in-service rule before the next campaign goes out.
• Book January 2 on the calendar to strip every credit reference from ads, pages, profiles, scripts and sequences.
• Write January ads around drafts and comfort, using ENERGY STAR’s own figures with their qualifiers if you use numbers at all.

A credit that ends on a fixed date is easy to plan for and easy to get wrong in the last two weeks. Our page on marketing for window and door installers sets out how we plan the year around dates like this one, and our Google Ads work covers the ad copy audits that go with them.