diff --git a/config/common/common.go b/config/common/common.go
index 08e43f25ed..eca60ead77 100644
--- a/config/common/common.go
+++ b/config/common/common.go
@@ -16,6 +16,7 @@ import (
 	xpresource "github.com/crossplane/crossplane-runtime/pkg/resource"
 	"github.com/crossplane/upjet/pkg/config"
 	"github.com/crossplane/upjet/pkg/resource"
+	"github.com/hashicorp/terraform-plugin-sdk/v2/terraform"
 	jsoniter "github.com/json-iterator/go"
 	"github.com/pkg/errors"
 	corev1 "k8s.io/api/core/v1"
@@ -142,3 +143,31 @@ func RemovePolicyVersion(p string) (string, error) {
 	r, err := jsoniter.ConfigCompatibleWithStandardLibrary.Marshal(m)
 	return string(r), errors.Wrap(err, "failed to marshal the policy map as JSON")
 }
+
+// RemoveDiffIfEmpty removes supplied keys from Terraform diffs, if old and new
+// values for the key are empty (""). It is probably safe to delete all such
+// keys in the diff. Until we decide to do so, we'll specify the keys, to be on
+// the safe side.
+func RemoveDiffIfEmpty(keys []string) config.CustomDiff { //nolint:gocyclo // The implementation is pretty straightforward as of this writing.
+	return func(diff *terraform.InstanceDiff, state *terraform.InstanceState, config *terraform.ResourceConfig) (*terraform.InstanceDiff, error) {
+		// Skip diff customization on create
+		if state == nil || state.Empty() {
+			return diff, nil
+		}
+		if config == nil {
+			return nil, errors.New("resource config cannot be nil")
+		}
+		// Skip no diff or destroy diffs
+		if diff == nil || diff.Empty() || diff.Destroy || diff.Attributes == nil {
+			return diff, nil
+		}
+
+		for _, key := range keys {
+			if diff.Attributes[key] != nil && diff.Attributes[key].Old == "" && diff.Attributes[key].New == "" {
+				delete(diff.Attributes, key)
+			}
+		}
+
+		return diff, nil
+	}
+}
diff --git a/config/ec2/config.go b/config/ec2/config.go
index e9c9eae023..a1059c7856 100644
--- a/config/ec2/config.go
+++ b/config/ec2/config.go
@@ -53,6 +53,9 @@ func Configure(p *config.Provider) { //nolint:gocyclo
 				"cpu_threads_per_core",
 			},
 		}
+		r.TerraformCustomDiff = common.RemoveDiffIfEmpty([]string{
+			"volume_tags.%",
+		})
 		config.MoveToStatus(r.TerraformResource, "security_groups")
 	})
 	p.AddResourceConfigurator("aws_eip", func(r *config.Resource) {
diff --git a/go.mod b/go.mod
index 8c05c8ac38..e581bfe5e2 100644
--- a/go.mod
+++ b/go.mod
@@ -439,4 +439,4 @@ require (
 // copied from the Terraform provider
 replace github.com/hashicorp/terraform-plugin-log => github.com/gdavison/terraform-plugin-log v0.0.0-20230928191232-6c653d8ef8fb
 
-replace github.com/hashicorp/terraform-provider-aws => github.com/upbound/terraform-provider-aws v0.0.0-20241203141151-997a60ec5360
+replace github.com/hashicorp/terraform-provider-aws => github.com/upbound/terraform-provider-aws v0.0.0-20250102143213-c0eb96154778
diff --git a/go.sum b/go.sum
index e2f89981ec..6cd2734875 100644
--- a/go.sum
+++ b/go.sum
@@ -865,8 +865,8 @@ github.com/stretchr/testify v1.9.0 h1:HtqpIVDClZ4nwg75+f6Lvsy/wHu+3BoSGCbBAcpTsT
 github.com/stretchr/testify v1.9.0/go.mod h1:r2ic/lqez/lEtzL7wO/rwa5dbSLXVDPFyf8C91i36aY=
 github.com/tmccombs/hcl2json v0.3.3 h1:+DLNYqpWE0CsOQiEZu+OZm5ZBImake3wtITYxQ8uLFQ=
 github.com/tmccombs/hcl2json v0.3.3/go.mod h1:Y2chtz2x9bAeRTvSibVRVgbLJhLJXKlUeIvjeVdnm4w=
-github.com/upbound/terraform-provider-aws v0.0.0-20241203141151-997a60ec5360 h1:HLrTYw0kB74C7JMNM5dUe0h7V2nzvdSMzciWmsJCUvQ=
-github.com/upbound/terraform-provider-aws v0.0.0-20241203141151-997a60ec5360/go.mod h1:7l6VnUvAF/LY5jcEABkfHuK8gAkOODwTT1TcGpy+tl0=
+github.com/upbound/terraform-provider-aws v0.0.0-20250102143213-c0eb96154778 h1:RxW17Zn9BdCvSSeB7LGOZCoJJYO1d4VDvrdPmSRP5G8=
+github.com/upbound/terraform-provider-aws v0.0.0-20250102143213-c0eb96154778/go.mod h1:7l6VnUvAF/LY5jcEABkfHuK8gAkOODwTT1TcGpy+tl0=
 github.com/vmihailenco/msgpack v3.3.3+incompatible/go.mod h1:fy3FlTQTDXWkZ7Bh6AcGMlsjHatGryHQYUTf1ShIgkk=
 github.com/vmihailenco/msgpack v4.0.4+incompatible h1:dSLoQfGFAo3F6OoNhwUmLwVgaUXK79GlxNBwueZn0xI=
 github.com/vmihailenco/msgpack v4.0.4+incompatible/go.mod h1:fy3FlTQTDXWkZ7Bh6AcGMlsjHatGryHQYUTf1ShIgkk=