*The following guidance is not intended as legal advice, and you should consult a tax professional with specific questions.
2011 Tax Credit
On December 17, 2010, President Barack Obama signed into law the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010. Under this law, homeowners may claim a tax credit for the purchase of energy-efficient windows, doors, and skylights.
To be eligible for the credit on updated windows, doors, and skylights they must
- Meet ENERGY STAR program requirements
- Be installed in a taxpayer’s primary residence
- Be installed by December 31, 2011
Homeowners may receive a tax credit equal to 10% of the product cost (installation may NOT be included) up to
- $200 for eligible windows.
- $500 for eligible doors and skylights.
- Furnaces are only allowed a $200 credit and they must be 95% efficient, more stringent than the 90% requirement from 2009-2010.
- Wood heating systems are eligible for a max $300 tax credit.
Homeowners may receive no more than $500 total for all energy efficiency tax credits. These caps are also the new “lifetime limits” for the taxable years of 2006 to 2011. If you claimed an energy efficiency credit in a previous taxable year, please consult a tax professional to determine your remaining eligibility for this credit.
The Internal Revenue Service (IRS) has not yet made a determination as to what documentation a homeowner must retain when claiming this tax credit. Until IRS issues a guidance document for this tax credit, homeowners should save all available documentation, such as purchase receipts, ENERGY STAR labels, and manufacturers’ certification statements. Additional information will be provided if and when it is made available from the IRS.
2009-2010 Tax Credit
As of June 1, 2009, windows, doors, and skylights with U-factor and Solar Heat Gain Coefficient (SHGC) ratings of less than or equal to 0.30 are eligible for a federal tax credit of 30 percent of the product price, up to $1,500. Although it seems complicated to determine which products meet those requirements, ENERGY STAR makes it easy. Look for the official ENERGY STAR labels and you can be sure the product you are buying is eligible for the tax credit.
