Tax Credits for Windows, Doors and Skylights

To continue the still existing tax credits, there is also one for windows, doors and skylights:

The 2010 energy tax credit is gone, but there are still some smaller tax credits to take advantage of! From 2009 to 2010, the government helped out, letting you take $1,500 in tax credits for adding insulation. If you took full advantage of this credit make sure to file IRS Form 5695 in 2011.

If you didn’t take advantage and you wished you had, you still have options. At the last minute, the government added a suite of less generous but still useful energy tax credits, available only to those who didn’t take advantage of the 2009-2010 program.

Tax credit limits and deadlines:

10% of expenditures, up to $500 for the year, for all energy improvements combined.

Install the relevant doors, windows, and skylights by Dec. 31, 2011 and save your receipts and labels.

For doors, you can claim up to a $500 credit.

For windows and skylights, you can claim only up to a $200 credit. (That’s total—not per window.)

Installation is not covered!

To qualify, windows, doors, and skylights must have:

U-factor of 0.30 or less. Measures how well a product prevents heat from escaping.

Solar Heat Gain Coefficient (SHGC) of 0.30 or less.

Labels carry information on light transmission, air leakage, and condensation resistance.

Energy Star may modify these requirements, so check online before making a purchase.

According to the NFRC, says 80% to 85% of the manufacturers in North America provide NFRC labels. All Energy Star-qualified windows carry an NFRC label, according to Energy Star, a joint program of the U.S. Department of Energy and the U.S. Environmental Protection Agency that promotes energy-efficient products and practices.

Resist the urge to trim costs by purchasing cheaper windows, doors, and skylights with poor U-factor and SHGC ratings. Not only will you miss out on the tax credit, but energy bills won’t come down much.

By mid-January the official Energy Star site will be posting new guidelines on what exactly is covered.

Do your windows need to be replaced?

Most home inspectors will agree not to worry if windows are less than 15 years old. Savings on your energy bills will be negligible since window technology hasn’t changed that radically and the integrity of your windows should still be intact.

What about poor installation or manufacturing? Those might be exceptions to the 15-year rule. Windows that are 20, 30, or more years old are prime candidates for replacement.

Most of your focus should be on windows, since that is what you have the most of in your home. However:

Skylights are notorious for energy loss, too, not to mention water leaks.

Exterior doors tend to outlast windows, so keep them unless the upgrade is purely for aesthetic reasons. Besides, weather stripping and snug sweeps can boost the energy efficiency of exterior doors for a whole lot less money.