The available tax credits for replacement windows are a great way of saving a little extra money on your replacement windows. Our replacement windows tax credit guide has been put together to give you an overview of how the tax credit system works, who is eligible and how you can get hold of yours.
The Replacement Windows Tax Credit
Back in December of 2010 President Obama signed into the law on unemployment insurance reauthorization, job creation act and tax relief. What this basically meant is that homeowners are were able to claim a tax credit for a certain monetary value against the purchase of energy efficient products such as heat pumps, insulation, energy efficient windows, doors and skylights.
The tax credit awarded to you with mean your taxable income is lowered by the amount of the deduction on the replacement windows. So if you owed $5,000 in tax at the end of the year then your tax credit would be deducted reducing your owed amount to $4,800 instead.
The tax credit for energy efficient replacement windows is an extension of a previous tax credit, however some changes were made to the 2011 tax credit which you must be aware of before being able to decide if your eligible as well as how much you’re eligible for.
As of the time of writing this guide the available tax credit is equal to 10% of the overall cost of the windows, this will often not include any window installation charges.
Who Is Eligible For The Tax Credit?
If you’re able to get the tax credit then it’s a great way of saving extra money which can be used for other things around the home or maybe even for well needed vacation away with the family.
Before you can claim a tax credit you should check with a tax professional to make sure you have the remaining eligibility for the window credit. Since there is a limit to the amount of tax credits you can claim for installing energy efficient products within your home in your lifetime. The replacement window tax credit, just like many others, has a lifetime limit meaning that if you’ve claimed this particular credit before, you will not be able to claim it again.
Overall, the following eligibility requirements apply:
- Tax credit cannot be claimed more than once in a lifetime
- Tax credit of up to 10% only may be claimed against replacement windows, to a maximum of:
- $200 for eligible windows and skylights
- $500 for eligible doors
- Windows must meet the ENERGY STAR program requirements
To find out if a window qualifies for tax credits you can ask your local window contractors when they give you a quote or when you’re looking at window products they should state whether or not they are Energy Star qualified.
It’s important to note that you do not have to just replace windows to qualify, the tax credit can also be used against new windows providing that there was no window there previously. You also do not need to replace all windows or doors, you could be replacing just one or two to qualify.
There are many other tax credits available for other energy efficient products in your home including heating & cooling, solar energy, roofs, insulation and more. You can find out more about the 2011 tax credits for energy efficiency or find out how to apply for energy efficient tax credits.