The One Big Beautiful Bill (OB3) is living up to its name. It is big, it is packed with tax changes, and it is definitely going to impact your wallet in one way or another. Signed into law on July 4, 2025, OB3 brought plenty of new rules, some welcome updates, and a few changes that make us scratch our heads.

Two of the biggest changes for 2025 are easy to understand but important to act on:

• The end of the clean vehicle credit for electric cars
  
• The expiration of solar and energy efficient home credits

If you have been thinking, “I’ll get to it eventually,” this is your reminder: “Eventually” is about to become “too late.”

Electric Vehicle Credits Expire September 30, 2025

If you have been eyeing a shiny new electric car, the clock is ticking. As of September 30, 2025, the clean vehicle credit will no longer exist. That means no matter how perfect the deal looks in October, you will get zero credit for it on your taxes.

There is no “I signed a contract before the deadline, so it still counts” loophole. Your purchase has to be fully completed and the car in your possession before September 30. If you were waiting for a sign to head to the dealership, this is it.

Solar and Energy Efficient Home Credits End December 31, 2025

The second big expiration date is December 31, 2025, for solar and energy efficient home credits. This covers things like solar panels, certain HVAC upgrades, and other energy-smart improvements.

Here is the catch: the project has to be installed and running before the ball drops on New Year’s Eve. Contracts signed in advance will not help if the work is not complete. Since big projects like solar installations can take months to finish, you will want to start the process as soon as possible. Think of it like holiday shopping.. you do not want to be the one still in line at midnight hoping it works out.

Why These Deadlines Matter

These tax credits can add up to serious savings, and OB3 is taking them off the table for good. If you wait too long, you could be leaving thousands of dollars behind.

On top of that, these deadlines land during what is already shaping up to be a complicated tax season. 

All of that means less time for us to finalize returns, which is why planning ahead for these credits is more important than ever.

Extensions: Your Friend, Not Your Enemy

We know no one likes hearing the word “extension.” But here’s the truth: filing an extension does not hurt you. In fact, it can actually lower your audit risk compared to rushing a return or filing an amended return later.

This upcoming filing season will bring some unprecedented challenges:

• The removal of Billy Long as IRS commissioner means at least seven people will have held the role during 2025.
• Before leaving his position, Billy indicated the 2026 tax filing season may not start until mid-February, creating a very compressed season.
• As of May 2025, the IRS workforce has dropped 25%, from 103,000 employees to approximately 77,000.
• The IRS is also tasked with issuing guidance on the new One Big Beautiful Bill legislation signed on July 4. The first round of guidance is not due until October 2, which could delay form instructions, tax software approvals, and the season start date.

All of this points to less time than usual to complete and file accurate returns. This means more clients than normal may need to file an extension in 2026.

Just remember: an extension gives you more time to file, not more time to pay. If you expect to owe, you will still need to make that payment by April 15, 2026.

For our planning clients, we will reach out directly to discuss your specific situation. For compliance clients, if you have owed before or think you might this year, let’s talk about sending in a payment with your extension so you are covered.

What To Do Now To Make The Most Of These Credits

OB3 is here to stay, and its impact will be felt for years. But for right now, the two deadlines you cannot ignore are September 30 for electric vehicle credits and December 31 for solar and energy efficient home credits.

If either of these was on your wish list, now is the time to make it happen. We can help you run the numbers, figure out the potential savings, and make sure you are not caught off guard when these opportunities disappear.

At Watson & Associates, we are here to help you navigate The One Big Beautiful Bill, make the most of the credits still available, and prepare for whatever comes next in the tax world. Because the rules may change, but our commitment to looking out for you never will.