Energy Star Windows & Doors Tax Credit: What You Need To Know

If you have completed any work on your home, chances are you’ve heard about the U.S. government’s Energy Star program and how it helps homeowners lower their energy costs. However, additional state and federal incentives exist to make new windows and doors more affordable for anyone.

Upgrading your home’s windows and doors enhances its aesthetic appeal and energy efficiency and can provide significant financial benefits through federal tax credits. The Energy Efficient Home Improvement Credit allows homeowners to recoup some of their investment in energy-efficient windows and doors. Here’s everything you need to know to take advantage of these incentives.

Understanding the Energy-Efficient Home Improvement Credit

The Energy Efficient Home Improvement Credit is a federal tax incentive designed to encourage homeowners to make energy-efficient upgrades to their residences. By installing qualifying windows and doors, you can claim a credit equal to 30% of the product cost, subject to specific limits.

Credit Limits for Windows and Doors

• Windows and Skylights: You can claim 30% of the cost, up to a maximum of $600. For example, if you spend $2,000 on qualifying windows, you can receive a $600 tax credit.
• Exterior Doors: The credit is 30% of the cost, up to $250 per door, with a maximum of $500. So, if you install two qualifying doors costing $1,000 each, you can claim a $500 tax credit.

Eligibility Criteria

To qualify for these tax credits, homeowners must meet the program’s eligibility criteria.

1. Energy Efficiency Standards

• Windows and Skylights: You must meet the Energy Star Most Efficient certification requirements.
• Exterior Doors: You must meet applicable Energy Star requirements.

2. Primary Residence

The improvements must be made to your existing home, which serves as your primary residence. New constructions and rental properties are not eligible.

3. Installation Period

The products must be purchased and installed between January 1, 2023, and December 31, 2032.

Claiming the Tax Credit

Now, here’s the fun part. No one likes paperwork, but it’s the most vital part of the process when taking advantage of the program. To claim the credit, make sure you have the following:

1. Documentation

• Receipts: Keep all purchase receipts and installation records.
• Manufacturer’s Certification Statement: Obtain this statement from the manufacturer or retailer, certifying that the product qualifies for the tax credit.

2. IRS Form 5695

Complete the “Residential Energy Credits” form and submit it with your federal tax return for the year the products were installed.

Additional Considerations

Remember the other considerations in your quest to reclaim money from your window or door upgrade. Some parts of your upgrades, such as labor costs, cannot be claimed.

There are also annual limits to consider. The maximum credit for all energy-efficient home improvements is $1,200 per year. This includes the combined credits for windows, doors, and other qualifying enhancements.

Benefits of Energy-Efficient Windows and Doors

Getting new energy-efficient windows or doors means immediate cost savings on your energy bills. High-performance windows and doors maintain indoor temperatures more effectively, minimizing the work your HVAC unit needs to do to maintain comfort in your home.

Beyond financial savings, energy-efficient windows and doors enhance overall comfort in your home. They help reduce drafts and temperature fluctuations, creating a more consistent and pleasant indoor environment. Of course, these upgrades also help the environment by decreasing greenhouse gas emissions.

Take Action with Premier Home Exterior

Ready to enhance your home’s energy efficiency and capitalize on available tax credits? Contact Premier Home Exterior today. Our team of experts will guide you through selecting and installing Energy Star-certified windows and doors. We look forward to helping you soon!