Getting The Most Out of The 25C Tax Credit

There are only four months left for your customers to take advantage of the $1200.00, 25C tax credit, as well as other tax incentives and federal rebates. The Big Beautiful Bill is sunsetting the 25C and some other incentives 12/31/2025. That means you have about three months to use it to pack out the remainder of 2025.

 

If you haven’t helped customers to use the rebate yet, the first thing to understand is that the rebate specifically excludes labor for installing or preparing to install insulation. See IRS publication FS-2022-40 (See Q1 A1 in the Labor section) The second thing to know is that the rebate is limited to 30%, so if the job cost is still above $4000 after taking out the labor, they would receive the full $1200.

 

That said, $1200.00 goes a long way toward winning a job.  It doesn’t cost you anything and you could be using it right now, to land and close projects.  So how do you do it? I would start by going to 25CmeansBusiness.org. There is free marketing materials and all kinds of help with content or anything you need to advertise for the rebate.

 

Regarding who gets the rebate and how, the tax credit goes directly to the consumer when they file their taxes. They simply download or have their tax filer fill out and add form 5695 to their return. What they need from you, is an invoice for the project, with the labor removed.

 

For example, if I do a job for $7500, I need to show where the labor was taken out. What I don’t want to do though, is line item everything.  That raises more problems. I would simply show the total of $7500, then if I had $2000 in labor, I would show a line item where I subtract that. Then my final line would show a total for insulation and air sealing at $5500. The main thing there is making sure you are showing them how to cash in on the $1200 rebate for next year’s taxes.

 

If you have other questions on the Inflation Reduction Act, tax credits, rebates & incentives, or any of the products IDI carries, reach out to your local branch or contact any of us at IDI, where we look forward to earning your business every day.

 

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