Federal Tax Credits Available
The Economic Stimulus Plan of 2009 enables homeowners to qualify for a federal income tax credit of up to $1,500 in 2009 and 2010 for purchases of high energy efficient windows, doors and skylights.
Highlights:
- The qualifying federal income tax credit is equal to 30% of the cost of the windows, doors and skylights, up to a maximum credit of $1,500;
- The windows, exterior doors and skylights must be “placed in service” (meaning ready and available for use) between Jan 1, 2009 and Dec 31, 2010 in the principal residence of the taxpayer;
- The qualifying windows, doors and skylights must have a U-Factor (which measures heat loss) of 0.30 or lower, and a Solar Heat Gain Coefficient (SHGC, which measures heat gain) of 0.30 or lower;
- The tax credit is for the cost of the product only, and does not include installation costs;
- These tax credits do not apply to new home construction;
- Unlike a tax deduction, which only reduces a percentage of the amount of tax owed, a tax credit directly reduces the tax itself, dollar for dollar.
The maximum amount of federal income tax credits for the purchase of all energy home improvements combined (including windows, doors, skylights, roofs, insulation, HVAC, non-solar water heaters and biomass stoves) is $1,500 during the two-year period, 2009 and 2010, of the tax credit.
Documentation:
- To claim the tax credit, the homeowner should:
- Fill out IRS Form 5695 “Residential Energy Efficient Property Credit”, and file it with the 2009 or 2010 Federal Tax Return (Form 1040);
- Save, but do not include when filing the tax return, the following:
- WindowRama sales receipts for the merchandise;
- All NFRC performance labels for the windows, exterior doors and skylights. In lieu of these labels, obtain the Manufacturer’s Certification Statement, (which is generally available on the manufacturer’s website) which certifies that the product is eligible for the tax credit.
- Further information regarding the tax credits is available at www.energystar.gov.
The above information is provided by WindowRama as a guideline only. Consult your tax advisor or the IRS for information regarding how the tax credits may apply to your specific situation.
