- Days left

Use energy-efficient windows and save more with energy tax credits

As part of the American Recovery and Reinvestment Act of 2009 recently signed into law, there are several energy conservation incentives for homeowners, including a never better opportunity to install energy-efficient replacement windows.

There are lots of good reasons to consider replacing windows. Energy-efficient windows can help lower your monthly energy bills, while making your home more comfortable to live in. High-quality replacement windows can also add to the resale value of the home and result in an immediate reduction of heating and cooling bills. Replacement windows also require little maintenance and can add to your home's curb appeal.

Taxpayers purchasing replacement windows in 2009 and 2010 that meet specific energy efficiency requirements, they are eligible for 30% of the amount as a tax credit. This credit is capped at $1,500 for the years of 2009 and 2010.

To be eligible for the energy tax credits, windows purchased must be equal to or below a U Factor of 0.30 and a Solar Heat Gain Coefficient (SHGC) of 0.30. U Factor is the amount of heat transferred through a material. The lower the U-value, the slower the rate of heat flow and the better the insulating quality of the window. Solar Heat Gain Coefficient (SHGC) is the percentage of heat gained from both direct sunlight and absorbed heat. The smaller the number, the greater the ability to reduce solar heat gain into the home.

Both U Factor and a Solar Heat Gain Coefficient qualifying stats should be available from the replacement window manufacturer as well as be stated on the window's NFRC (National Fenestration Rating Council) label.

Other requirements for the tax credit include:

  • Purchase of the qualified windows must be made during the taxable year for which the credit is being claimed.
  • The credit is only allowed on the price of the qualified windows themselves, not on installation costs, onsite preparation, assembly or sales tax.
  • The credit is allowable only for qualified window units placed in service in 2009 and 2010.
  • Homeowners need to save their receipts for their windows purchased along with all window labels and stickers to apply for the tax credit.

When selecting a local contractor for your window replacement project, you should also carefully research the company they purchase their windows from. Things to look for include:

  • Manufacturer with a long, solid history of producing top-quality products.
  • Strong warranties on products
  • Companies that offer low maintenance products.
  • Manufacturer high industry reputation, reflected by awards won and strong approval by builders and remodelers who purchase their products every day.

For additional information on replacement window tax credits, go to the following manufacturer and government websites:

Tom Kraeutler is the Home Improvement Editor for AOL and co-author of My Home, My Money Pit: Your Guide to Every Home Improvement Adventure. He delivers home remodeling tips each week as host of The Money Pit, a nationally syndicated home improvement radio program.

Increase your money and finance knowledge from home

Economics 101

Intro to economics. But fun.

View Course »

How Financial Planners go Grocery Shopping

Learn to shop smart and save.

View Course »

TurboTax Articles

How to Write Off Sales Taxes

For the years 2005 through 2013, the Internal Revenue Service (IRS) permits you to write off either your state and local income tax or sales taxes when itemizing your deductions. People who live in a state that does not impose income taxes often benefit most from this deduction. However, you might also be better off deducting sales taxes instead of income taxes if you make large purchases during the year and your total sales tax payments exceed those for state income tax. You can use either the actual sales taxes you paid or the IRS optional sales tax tables.

Add a Comment

*0 / 3000 Character Maximum

1 Comment

Filter by:
JasonKnighte

I need to get myself better windows for my home. I have really old ones and I can feel the difference that they make because they aren't made very well. I have seen some of the newer windows and I think that they would make a world of difference for the heating and cooling bills on my home.

Jason|http://www.advancedoorservice.com/Residential/

May 08 2014 at 4:31 PM Report abuse rate up rate down Reply