Save your cash by claiming tax credits for new windows and doors

November 18, 2011

If you are thinking of getting new windows and doors, prices might be a bit of a deterrent. Replacing your existing windows and doors with new, energy-efficient ones, however, has huge benefits. First, you could lower your utility bills. Second, you could reduce greenhouse gas emissions. And, third, you could catch a break on your taxes.

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Under the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010, homeowners can file for a tax credit for the purchase of energy-efficient windows and doors. Prices for this home improvement project, if you've been putting it off, should be looking a little less daunting now that you know.

To receive this credit, homeowners must install qualified windows and doors on their primary residence between January 1, 2011, and December 31, 2011. New construction and rental homes do not qualify; however, adding new windows or doors during renovations does qualify.

If eligible for the tax credit, you could receive up to 10 percent of the cost (excluding labor and installation) for the windows and doors, up to $200 for qualifying windows and up to $500 for qualifying doors. To determine if your windows or doors meet all qualifications, look for the Energy Star label or visit www.energystar.gov.

A caveat to the 2011 tax credit is a new lifetime limit imposed on energy-efficient tax credits for the taxable years of 2006 to 2011. This lifetime limit is $500; therefore, if you claimed an energy-efficient tax credit during these years, talk with a tax professional to determine eligibility.

Tax credit availability for 2009 through 2010

The tax credit for 2011 is a continuing, albeit reduced, credit from 2009 and 2010. For homeowners who purchased qualifying windows and doors during these years, you still may be able to file for the tax credit. To qualify, eligible windows and doors must have been installed between January 1, 2009, and December 31, 2010. Eligibility requirements for windows and doors varies during this qualifying time frame.

  1. From January 1 to May 31, 2009, all Energy Star-qualified windows and doors are acceptable, with the exception of some doors in certain California counties. (see www.energystar.gov for specific eligibility requirements.)
  2. From June 1, 2009, to December 31, 2010, windows and doors must have a U-factor and Solar Heat Gain Coefficient (SHGC) less than or equal to 0.30.

Eligible homeowners could receive a tax credit for 2009 and 2010 of as much as 30 percent, up to $1,500.

To apply for either tax credit, you must file Tax Form 5695 with your regular federal tax return. Ask your tax professional for the form, or download one at www.irs.gov. Also, retain all your windows' and doors' receipts and the Manufacturer's Certification Statement with your tax records.


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