It takes the credit out of the math. Section 25C does not apply to property placed in service after December 31, 2025, so a 2026 foam project gets no federal credit whenever it was signed. Price it on energy savings, comfort, and any utility program you qualify for.
More detail
Under the old rules, 25C paid 30 percent of qualifying insulation and air-sealing material costs, capped at $1,200 a year. IRS guidance on Public Law 119-21 says the credit will not be allowed for any property placed in service after December 31, 2025. That has two practical consequences. A project finished in 2025 can still be claimed on the 2025 return with Form 5695, so if late-2025 work never made it onto a return, raise it with your tax preparer. A project finished in 2026 should be judged with no federal offset at all. What replaces the credit locally is thin: Duke Energy Ohio's efficiency spending under its June 2025 to May 2028 rate plan is limited to income-eligible customers, the Weatherization Assistance Program serves households at or below 200 percent of the poverty guidelines, and on the Kentucky side Duke Energy Kentucky's Smart $aver tariff caps envelope incentives at $250. The energy case never depended on the credit, though. ENERGY STAR estimates that sealing and insulating typically trims about 15 percent from heating and cooling costs, and in a climate with close to 4,900 heating degree days a year that still pays back fastest on the leakiest spots: the rim joist, the attic floor, and the knee walls. See the 2026 incentives rundown and the tax credit FAQ for program details.