From Margaret Everton on March 20, 2009 in Window Replacement
April 15th is a date that looms over all our heads like a swollen, angry black cloud that we know will burst open upon us. The only question is: how bad will it be? Hoping to make it not so bad, President Obama signed a stimulus package with the desire to alleviate some of the hardships facing American citizens today. Part of his stimulus package includes stipulations for tax credits, which can be earned by homeowners who make energy efficient improvements to their primary residence.
While some of these tax credits were already in existence before Obama took office, there are some changes which need to be sorted out to ensure you purchase qualifying materials and file for the credit properly. One of the changes - for the better - is that the tax credit cap has increased to $1500 for home improvements. Keep in mind, though, that the cap is for a combined credit of the years 2009 and 2010 - not for each year, but for both together.
Another new change gives credit for window replacement, but not just any low-e, Energy Star-rated windows will do. There are new qualifiers to be met now for new standards of energy efficiency in windows. Under the current stimulus package, you must purchase your special windows and have them installed between the dates of February 17, 2009 and December 31, 2010. (If you jumped the gun and bought the proper windows between January 1 and February 16, 2009 - no one knows for sure what credit, if any, youll qualify for on your taxes next year.) The tax credit is for 30 percent of the window purchase price, up to $1500.
Aside from timing, youll also need to make sure your new windows have a U-factor AND a solar heat gain coefficient (SHGC) of less than or equal to .30. Sure. Uh-huh. Because we all know what that means. Luckily, some people know (not me, until I did some homework) and have spelled it out for us. The U-factor is the amount of heat loss - or heat flow - that passes through the glass in a window. The lower the U-factor, the more efficient the window. The SHGC is a measurement of how much heat gain comes through a window or is absorbed by the unit. Again, the lower the number the better.
Essentially, what they seem to be getting at is that they are trying to get window manufacturers to make windows that allow a home to retain all the electric and fuel-based heat that you pay for in the winter and keep all of the excess summer heat outside.
A few warnings, though. Many window manufacturers, who have been suffering through this recession, have jumped at this new opportunity to sell windows. Some, however, do not have products that qualify for tax credits, although you may not find this out until a year later when you take your information to your accountant.
Also, a tax deduction and a tax credit are different. A tax deduction reduces the amount of income the federal government can tax whereas a credit is a reduction in the amount of taxes you owe. In order to properly receive your tax credit you will need to have your receipt for the windows, the manufacturers certification statement showing the specifications of the window that meet the credit stipulations and a special IRS Tax Form 5695 (2009 version).
Basically, a set of replacement windows that qualify for Obamas tax credits can keep you from throwing your money out the window! Like in other aspects of life, however, youll have to spend money in order to make money.
Let us connect you with 100% free estimates from window contractors who can give you more information on the stimulus package as it relates to your home improvement project.