Imagine this: Terry, the eco-loving entrepreneur behind Virginia’s finest biodegradable sock line, is finalizing a deal on a pre-owned electric delivery van. He’s counting on that sweet $4,000 federal tax credit to offset the cost. But—plot twist—the credit may disappear months earlier than expected.
That’s the reality many taxpayers now face as “The One, Big, Beautiful Bill” races through Congress. Passed by the House on May 22, 2025, this bill could accelerate the expiration of several major environmental tax credits from 2032 to December 31, 2025.
If you’ve been planning solar upgrades, buying electric vehicles, or making energy-efficient home improvements, you may have just five months left to act.
1. Previously Owned Clean Vehicle Credit: Great for Budget-Conscious Eco-Drivers
If you’re eyeing a used EV or plug-in hybrid, this credit might be your best friend—until it vanishes.
What qualifies?
- Must be at least 2 model years older than purchase year
- Previously owned (i.e., not new)
- Must be bought from a dealer
- Must have a battery of 7+ kWh and plug-in capability
- Price must be ≤ $25,000
- Gross Vehicle Weight Rating < 14,000 lbs
Tax Credit:
- Lesser of $4,000 or 30% of sale price
Income Limits:
- $75K single | $112.5K HOH | $150K joint
Expiration:
- December 31, 2025
Real-World Use Case: Terry could save $3,000 buying that $10,000 EV van—if he closes before year-end.
2. New Clean Vehicle Credit: $7,500 for New EVs Still on the Table
Thinking about a new Tesla or Rivian? Time is ticking.
Key Requirements:
- Must be from a qualified manufacturer
- Dealer must file necessary forms with the IRS
- Vehicle must be placed in service within 2025
- You must be the original owner
- Vehicle must be used primarily in the U.S.
Tax Credit:
- Up to $7,500 (split into $3,750 for battery and $3,750 for assembly requirements)
Income Limits (MAGI):
- $150K single | $225K HOH | $300K joint
Expiration:
- December 31, 2025
Tip: If you’re a business owner or consultant using EVs for daily operations, you may qualify for this generous credit—just make sure your paperwork is buttoned up.
3. Energy Efficient Home Improvement Credit: Reduce Your Bills (and Taxes)
Homeowners making eco-upgrades could claim up to $1,200 annually—or more for certain installations.
Qualified Upgrades Include:
- Insulation
- Energy Star windows and doors
- Metal/asphalt heat-reflective roofing
- High-efficiency HVAC systems
- Qualified water heaters and heat pumps
Tax Credit:
- 30% of qualified expenses
- $1,200 annual cap (up to $2,000 for heat pumps and biomass stoves)
Income Limits:
- None
Expiration:
- December 31, 2025
- Projects must be 100% complete and may require inspection
Strategy Tip: For homeowners in areas like McLean or Vienna, this is a tax-smart way to boost property value and sustainability before year-end.
4. Residential Clean Energy Credit: Solar, Wind, and Storage Incentives Still Shine
Thinking solar? There’s still time—but you’ll need to act fast.
Qualifying Systems:
- Solar electric systems (photovoltaic panels)
- Solar water heaters
- Geothermal heat pumps
- Small wind turbines
- Fuel cells
- Battery storage technologies
Eligible Properties:
- U.S. residences (including second homes, but not rentals)
- Includes labor, assembly, and installation costs
Tax Credit:
- 30% of qualified expenditures
- No max credit limit
Income Limits:
- None
Expiration:
- December 31, 2025
- Full completion and inspection may be required
Pro Tip from JS Morlu: For high-net-worth individuals with multi-property portfolios, this is a rare opportunity to stack energy savings and long-term tax advantages.
What This Means for You
“The One, Big, Beautiful Bill” hasn’t passed the Senate—yet. But if it does, the countdown to these environmental credits’ end begins.
Why act now?
- Contractors may raise prices or become booked
- IRS processing times may slow as the deadline nears
- You risk losing out if Congress passes the bill retroactively
Take Action:
- Get estimates now
- Secure contractors and documentation
- Consult your tax advisor about project timing
How JS Morlu Can Help
As tax and compliance experts serving government contractors, high-net-worth individuals, and small business owners across Virginia and the DMV, JS Morlu offers:
- Personalized tax planning
- Clean energy credit optimization
- Year-round support for IRS filings and documentation
- Audit readiness and advisory for green investments
📞 Contact us today for a personalized consultation on how to capitalize on these soon-to-expire credits before it’s too late.
