- 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

Intro to Retirement

Get started early planning for your long term future.

View Course »

Banking Services 101

Understand your bank's services, and how to get the most from them

View Course »

TurboTax Articles

5 Tax Tips for Single Moms

If you're a single mom filing your taxes, make use of tax credits and deductions that can help reduce your taxable income and reduce the amount of tax you pay. A number of strategies, credits and deductions can be used to reduce taxable income, and in some cases, allow tax refunds even if you didn't pay in any taxes. When you use TurboTax, we'll ask simple questions and handle these calculations for you.

Essential Tax Forms for the Affordable Care Act

The Affordable Care Act (ACA), also referred to as Obamacare, affects how millions of Americans will prepare their taxes in the new year. The law now includes penalties for all who haven?t obtained health insurance -- and those penalties are expected to be paid at tax time. The ACA also provides tax credits to help people pay for insurance, and you can claim those credits when you file your taxes. The Internal Revenue Service (IRS) has introduced a number of tax forms to accommodate the ACA.

What is Form 1095-A: Health Insurance Marketplace Statement

If you bought health insurance through one of the Health Care Exchanges, also known as Marketplaces, you will receive a Form 1095-A which provides information about your insurance policy, your premiums (the cost you pay for insurance) and the people in your household covered by the policy.

Keeping Yourself Safe From Tax Scams Today

During tax time, there are numerous types of tax scams. These illegal schemes can result in the taxpayer being responsible for extra interest, penalties and possible criminal prosecution. Tax schemes and scams attempt to gain access to your financial information by email, telephone, fax or mail. They also may attempt to falsely collect tax you owe to the Internal Revenue Service. Using TurboTax ensures your financial information remains safe.

Health Care and Your Taxes: What's the Connection?

Your cost for Marketplace health insurance is based on the income you file on your tax return. Your reported income also determines your eligibility for the tax credits and penalties associated with Marketplace health coverage. Everyone has to have health insurance and by filing your taxes, you let the government know if you carry health insurance. The tax system acts as a way for the government to levy a penalty on those who don?t have it and to provide assistance, by means of a tax credit, to those who do.

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