House Democrats Try Long Shot Attempt to Save 25C

House Democrats on the Ways and Means Committee are making a last-minute push to keep the 25C Home Energy Efficient Improvement Tax Credit alive beyond its scheduled expiration. Their argument centers on a technicality: the Inflation Reduction Act (IRA) moved the termination clause for the credit from subsection (h) to subsection (i), and redefined Subsection H to deal with Product Identification Numbers (PINs). Democrats argue that because the termination clause was no longer in subsection (h), Republicans’ One Big Beautiful Bill amending subsection (h) to end the credit in 2025 was legally ineffective.

What does the US Code say?

The problem with this claim is how federal law is codified. The U.S. Code is the official compilation of federal statutes, but only some parts are enacted into “positive law.” Positive law text is itself the controlling legal authority, while other sections are “non-positive law” and serve as evidence of the law until Congress enacts them directly.

The IRA’s changes to 25C were never fully written into positive law because of a drafting error that left the effective date out. As a result, the IRA revisions remain in a note section of the Code, waiting for Congress to pass a technical correction. When the “One Big Beautiful Bill” was enacted, subsection (h) in positive law still contained the termination language. The amendments by the IRA, while included in the US Code, are in a note showing the amendment of the section, awaiting a technical correction so they can be incorporated into positive law. That means amending subsection (h) to set the credit’s end date at the close of 2025 was legally valid and will be enforced by Treasury.

IRS unlikely to change position

The IRS has already issued guidance confirming that 25C expires for property placed in service after December 31, 2025. This guidance sets the practical rule for contractors and homeowners: equipment must be installed and operational by the end of the year to qualify. Simply signing a contract or placing an order will not be enough if the system is not placed in service before January 1, 2026.

This makes the Democrats’ strategy a long shot. Litigation would be the only real way to challenge Treasury’s reading, and a lawsuit from House Democrats is unlikely. Courts generally defer to the positive law version of the U.S. Code: “Non-positive law titles are prima facie evidence of the law, but positive law titles constitute legal evidence of the law in all Federal and State courts.”

HARDI’s Take

For distributors, this means the 25C credit is almost certain to expire at the end of 2025 unless Congress acts again. Time is running out for homeowners to take advantage of the credit, and members should encourage contractors to schedule qualifying projects as soon as possible to avoid installation delays in December. HARDI will continue monitoring Treasury guidance, potential lawsuits, and any movement on a technical correction, but at this point, the safest assumption is that the credit will not be available for work completed after 2025.

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