Breaking Down the Federal Tax Credit for Energy Efficient Windows
Save money on taxes and your energy bill. Photo Credit: GEM
Just after Valentine’s Day, 2009, President Obama signed the American Recovery and Reinvestment Tax Act of 2009. That bill, simply known as Obama’s stimulus plan, extended and improved the previous federal tax credits for energy efficient windows, including skylights and other efficiency upgrades.
The most notable modification in the bill boosts the maximum credit for energy efficient windows to $1,500. The federal government will reimburse homeowners for up to 30% (or $1,500) of the cost for new energy efficient windows. So, in order to qualify for the full credit, you’ll have to spend $5,000 on energy efficient windows - not hard to do if you upgrade the whole house in one fell swoop.
Note that the federal tax credit does NOT recognize installation costs as eligible for the credit. Only windows and related equipment costs are eligible.
Time Line & Standards
- Qualifying window products must be purchased between January 1, 2009 and December 31, 2010. Energy efficient windows purchased in 2008 were eligible for a tax credit this year, but at levels preset in the Energy Policy Act of 2005.
- Windows bought before June 1, 2009 must meet current Energy Star criteria. You can use the Energy Star label or manufacturer documentation as proof that a window is eligible for the credit.
- Windows bought after June 1, 2009 must meet slightly stricter standards. They must have a U-factor and Solar Heat Gain Coefficient (SHGC) of 0.30 or less. These ratings are certified by the National Fenestration Rating Council (FNRC), whose distinct label can be found on any new window. To document the window’s eligibility, you must provide a manufacturer certification statement, which your window supplier should have.
Where to Find Qualifying Windows
There are at least 550 certified Energy Star window manufacturers, including every major window brand in the country. All can produce windows that qualify for the tax credit. Many of these manufacturers have set up informative links on their websites to help you purchase the correct energy efficient window.
If you want to buy local or regional products, then start with a list of window companies in your area. Jot down a few companies and search the Energy Star website to see if each company is an Energy Star partner. The odds are good that a name on that list will also manufacture a window to meet the newest standards.
Energy Star also offers a Rebate Finder for locating other incentives in your area, often through local utilities.
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