New Manufacturer and Product Identification Requirements for the Energy Efficient Home Improvement Credit

The IRS released Fact Sheet 2025-01 to provide new and revised guidance on the energy efficient home improvement credit (§25C) and the residential clean energy credit (§25D).

One major change to the §25C credit takes effect this tax year. Starting January 1, 2025, new manufacturer and product identification requirements will apply to taxpayers claiming the §25C energy-efficient home improvement credit. These requirements will enhance compliance and simplify the verification of eligible property. 

These changes impact both manufacturers and homeowners looking to take advantage of the credit. Frost Law can help you verify if you're eligible for the §25C credit. Call us today at (305) 414-0494 for a consultation.

Qualified Manufacturers (QMs) Must Register with the IRS

A QM is any manufacturer that registers with the IRS, agrees to assign a unique Product Identification Number (PIN) to each item of specified property, labels the property with the PIN, and periodically reports PINs to the IRS. Manufacturers must register through the IRS Energy Credits Online Portal.

Manufacturers submitting their QM registration by April 30, 2025, and receiving IRS validation, will be considered QMs as of December 31, 2024, thus allowing products they produced on or after January 1, 2025, to qualify for the §25C credit.

The IRS issued Revenue Procedure 2024-31 to provide the procedures and requirements that a manufacturer of specified property must follow to become a QM.

New PIN Requirement for Taxpayer Claims

Starting January 1, 2025, taxpayers must provide a PIN for each eligible product on their tax return to claim the §25C credit. A four-character QM Code may be used instead of a full PIN for 2025 only. For property placed in service on or after January 1, 2026, a full 17-character PIN is required.

To claim the §25C credit for enabling property (such as electrical panel upgrades necessary for other energy-efficient improvements), a taxpayer must install the enabling property in the same tax year as the supporting property. If installed in consecutive tax years, taxpayers may treat all of the property as installed in the same tax year, provided it is the later of the two years.

What Property Requires a PIN?

Specified property (such as exterior windows, exterior doors, heat pumps, and water heaters) requires a PIN for the credit. Insulation materials or systems do not require a PIN. No PIN is needed for a home energy audit.

How a Taxpayer Obtains a PIN?

The PIN will be affixed to the product, packaging, or a document inside the packaging. If it is missing, a taxpayer can request the PIN from the manufacturer. The IRS will publish a list of QMs to help taxpayers verify eligibility before purchasing energy efficient property.

Don't get caught off guard by these new requirements. Contact Frost Law today at (305) 414-0494 or fill out our contact formto discuss how these changes affect your eligibility for the energy efficient home improvement credit.

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