The Tax Credit for Energy Efficient Windows, Doors and Skylights
As a result of the stimulus bill, homeowners can claim a tax credit of up to $1,500 for upgrading their primary residence with energy efficient appliances and building components, such as exterior windows, doors and skylights. This way, homeowners can reduce their income tax by up to thirty percent of the purchase price (not including installation costs) of qualified products installed in 2009 and 2010.
The tax credit helps you save money on the purchase of windows, doors or skylights, but the real money savings are what you'll save in the long term with reduced energy bills. Upgrading to energy-efficient windows and doors can save home-owners hundreds of dollars in heating and cooling costs each year.* And, of course, more efficient windows and doors also substantially enhance comfort, reduce condensation, and help to protect the environment and conserve limited resources.
What are the qualifying criteria?
U-factor ≤ 0.30 and SHGC ≤ 0.30
In order to qualify, windows, doors, and skylights must be accompanied with a signed statement from the manufacturer certifying that the product complies with the tax credit criteria. Qualified windows, doors, and skylights need to have NFRC-certified U-factor and Solar Heat Gain Coefficient (SHGC) ratings that do not exceed 0.30.
Exception: According to the IRS, All ENERGY STAR windows purchased before June 1, 2009 qualify for the tax credit even without a manufacturer's certification statement.
These criteria apply throughout the United States. A low U-factor indicates good insulating value, which is particularly important in cold climates, whereas a low SHGC indicates less solar heat gain, which is particularly important in climates with high cooling demand. U-factor and SHGC ratings can be found on the NFRC label (see below).
Homeowners should keep the manufacturers certification statement with their records but are not required to submit it with their tax return.
Overall information on the tax credit
This document is not intended to constitute legal or tax advice. More comprehensive information is available in IRS notice 2009-53. Individuals should consult their own independent tax advisers.
For more information on the tax credit for new windows and other energy improvements, view:
- The Internal Revenue Service site: www.irs.gov/newsroom/article/0,,id=206871,00.html
- The Alliance to Save Energy site: www.ase.org/content/article/detail/2654
- The ENERGY STAR site: www.energystar.gov/index.cfm?c=products.pr_tax_credits
* View estimated savings on the ENERGY STAR site www.energystar.gov/index.cfm?c=windows_doors.pr_savemoney. Actual savings will vary by climate region and home characteristics.