Tax Credit for Replacement Windows

The government, in an effort to get homeowners to become more energy conscious, is offering a tax credit when old windows are replaced with new energy efficient ones. This money is part of the stimulus package that was passed last year.

The tax credit allows homeowners to deduct 30% of the total cost of the house window replacement off of their taxes for the year that it was replaced. You can deduct a total of $1500 per year, so the maximum per year that can be spent on replacements is $5000. You can always spend more but $5000 is the most you can use toward the deduction.

It is important to note that not any window qualifies for the tax credit. The government has released specifications on the types that are allowed. The windows that will qualify must have a 0.30 Solar Heat Gain Coefficient (SHGC) and a 0.30 U-Factor value or better. These values will be clearly marked on the outside packaging. You can also visit any home improvement or manufacturer sales store as the associates there can make sure you select the best house windows for your project. Used house windows, even though they may have the energy rating required, will not qualify for the credit.

To avoid complications at tax time it is important that you purchase and install the windows in the same tax year. Since the credit covers the entire cost of the process, including the purchase and installation, you want to make sure you don't split years between the purchase and install. 2010 is the last eligible year for homeowners to claim this deduction as it expires on December 31st 2010. As with any deduction that you will apply make sure to keep all your receipts for all aspects on the replacement window process such as labor, supplies, hardware and the cost of the window itself.

Since the process of replacing your windows will provide energy cost savings in your home, why not take advantage of the stimulus money and get and additional $1500 from the government for replacing windows in your house. The credit and the long term energy savings will pay for the replacements costs in a few years while you enjoy the benefits of the replacement.