Extended Tax Credits for Energy-Efficient Windows! 

Happy New Year from the taxman! Just before the clock struck, the federal government extended tax credits for efficient windows.

If you installed efficient windows this year, I’ve got great news: one of the Department of Energy’s tax incentives and credits was extended to cover purchases through the end of 2022. You’ll be able to claim it on your tax return this year.  

The Non-Business Energy Property Tax Credit for certified ENERGY STAR windows is one of the main window tax credits available in 2022 and allows you to claw back as much as $200 on your 2022 tax return, or 10% for a window that costs less than $2,000, according to an update published Dec. 30. The figure does not include installation costs. What qualifies for this energy tax credit? To start, the windows must have been installed before 2023 in your primary residence. That could mean replacing an older window or installing a new window where there wasn’t one before — such as in an addition to your house. 

This means that as long as you live in it most of the time, and it’s in the U.S., your house, mobile home, houseboat, cooperative apartment, condo, or manufactured home qualifies. And you don’t have to replace all your windows – just one will do. To claim the credit, you’ll need to complete and submit IRS Form 5695 with your tax return. Which sounds like a miserable exercise in paperwork, but it’s actually not too bad — just a two-page form in which you tick some boxes, have the calculator app open on your phone, and follow the IRS’s detailed instructions available at the link to come up with the value you’ll claim.  

This tax credit won’t be available to you if you haven’t yet installed your windows, but if that’s you, you’re not too late. Your timing is perfect, as this is one of the tax credits that will be expanded and more valuable once the tax incentives in the 2022 Inflation Reduction Act are available. The program is about to be renamed the Energy Efficient Home Improvement Credit and will now allow you to claim 30% of the cost – triple the previous cap.  

For a full explanation of this new version, what qualifies for this energy tax credit, as well as the other tax incentives now available through the new law, see our blog post from Oct. 18, 2022. And be sure to check back often. As we told you in October, the final rules and details for many of the new incentives aren’t yet available. But we’ll be watching for them. Our readers tell us they love the idea of efficient windows much more than they love the price tag, so one of our missions is to help bridge the money gap. We’ll have lots more content to come on tax incentives, deals, and ways to make these premium products affordable.