What Tax Credits Are Available For Replacing Windows?

Replacement WindowsThere is an increased focus on energy efficiency with tax credits available for replacing windows. Proper windows are an important part of insulation and energy efficiency. Installing energy star efficient windows in your home will not only increase the value of your home, save you money on energy costs, but may also provide a tax credit based on what kind of windows you installed and when you installed them. Here are some tips to gaining tax credits available for replacing windows.

What Windows Qualify For A Tax Credit?

Not all windows qualify for a tax credit. You need to make sure the windows, skylights, and sliding doors you installed received an Energy Star rating. Energy Star is the government’s rating system to distinguish environmentally-friendly products from everything else. Talk with your contractor or window replacement specialist to make sure you receive energy efficient windows that qualify for a tax credit.

When Are Tax Credits Available?

Unfortunately, tax credits aren’t always available for window replacements. Due to economic uncertainty and tensions in congress, tax credits are usually only approved for a year or two at a time. If you replaced your windows in 2011, you would qualify for the Non-Business Energy Property credit. If you replaced your windows, doors or skylights in 2012–2013, you would want to apply for the Tax Credit for Energy Star Qualified Windows, Doors and Skylights, according to the Department of Energy. Talk to your accountant or tax professional to determine which tax credits you may qualify for.

How Much of a Tax Credit Will You Receive?

Depending on the year, your tax credits may differ slightly, but the last few years have looked relatively the same. Basically the IRS will credit homeowners 10% the cost of replacing windows or doors, up to a total of $500. Only $200 can be used towards windows, while the rest must be used on doors. If you replaced your sliding door as well as all your windows, the cost will most likely earn you that $500 total. Talk to a tax professional to figure out the definite amount of how much you will earn through your tax credit.

Is the Tax Credit Worth It?

Around April, you may be happy to receive any sort of tax credit, but is replacing your windows and doors really worth it? The short answer is, yes. While the tax credit won’t pay for the entire replacement and installation process, the money you will save in energy costs will help cover the rest. The single biggest cost to homeowners is heating and cooling. If you spend hundreds or thousands of dollars a year maintaining the temperature of your home, you need to have proper installation. Old and badly installed windows and doors can let the cool air out in the summer and in during the winter. This forces your HVAC system to kick on more often, costing you money. When you replace your windows with energy star models, it helps insulate your home and reduces the cost of heating and cooling your home. Those savings in addition to the tax credit make the project totally worth it.

Related Resource: Know When You Need To Replace Your Windows

Replacing your windows in your home is a great way to earn an energy efficient tax credit. You will have proper insulation and your home will be more comfortable at a fraction of the cost. Talk to your tax professional about earning tax credits available for replacing windows.