Republican Tax Bills Target Clean Energy Incentives for Elimination by 2026

House and Senate Republicans are advancing legislation that would eliminate a wide range of consumer tax credits tied to clean energy beginning in 2026, including incentives for electric vehicles and home energy efficiency upgrades.

The House has already passed the “One Big Beautiful Bill Act,” and the Senate may vote on a similar measure as early as next week. Both versions propose terminating several tax credits established or expanded under the 2022 Inflation Reduction Act, which aimed to accelerate the nation’s shift away from fossil fuels.

Dollar bills | Source: Pexels

Among the credits facing elimination are the $7,500 tax credit for new electric vehicle purchases, the $4,000 credit for used EVs, and the energy efficient home improvement (25C) and residential clean energy (25D) credits. These programs currently help offset costs for solar panels, heat pumps, and other energy-saving home projects.

Republicans intend to repurpose the resulting federal savings — along with funds from cuts to Medicaid and food assistance programs — to support a broader package of tax cuts for households and businesses.

Matt Gardner, senior fellow at the Institute on Taxation and Economic Policy, stated, “The intention of Republicans writing the bill is to root out all of the incentives from moving away from fossil fuels that the Biden administration puts in place, and it’s just a question of timeline.”

Electric vehicle charging | Source: Pexels

Under the proposed legislation, most credits would end by 2026 — seven years earlier than scheduled under current law. Some provisions would expire even sooner, with the used EV credit ending 90 days after enactment and others, including credits for leased vehicles and energy efficiency, ending after 180 days.

The final legislation will require alignment between both chambers before reaching President Trump’s desk.