If you’re in the market for new windows, a skylight, or a new exterior door, the Feds have made the cost a little more palatable with an energy tax credit.
If you installed new windows, doors, or skylights, you may be able to claim up to $500 in tax credits.
The Energy Star site is your safest bet for information on how to get the credit and what’s covered. Don’t rely solely on contractors who may not know the details or who promise their products will get the credit in order to make a sale.
Should you be thinking about window replacement?
A good rule of thumb for window replacement:
Most of your focus should be on windows, since they’re more numerous. However:
Adding up the costs and savings
With windows, doors, and skylights, you get what you pay for:
Products on the higher end of the cost scale are usually better constructed and more energy efficient, says Tom Herron of the National Fenestration Rating Council. NFRC is a non-profit organization that administers the rating and labeling system for the energy performance of windows, doors, and skylights. It could take years to recoup the upfront costs, but you should see an immediate reduction in your energy bills.
In general, you’ll save $126 to $465 per year replacing single-pane windows in a 2,000-square-foot house with tax-credit-eligible windows, according to the Efficient Windows Collaborative, a trade group.
In other words, you’ll save 15% to 40% off the typical energy bill.
Do your replacements qualify for tax credit?
A label alone doesn’t guarantee your new windows, doors, and skylights qualify for the energy tax credit, but it does provide critical information related to eligibility.
To qualify, window, doors, and skylights must meet Energy Star 6.0 standards based on region of the country. Those standards include ratings for:
Energy Star may modify these requirements, so check online before making a purchase.
Labels also carry information on light transmission, air leakage, and condensation resistance.
Herron, of 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.
This article provides general information about tax laws and consequences, but isn’t intended to be relied upon as tax or legal advice applicable to particular transactions or circumstances. Consult a tax professional for such advice.
Published: January 15, 2016
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