Certain exterior windows and doors that are ENERGY STAR® qualified for the climate zone in which they are installed MAY be eligible for the tax credits as set forth in the extension of THE INFLATION REDUCTION ACT OF 2022.
It is important for the homeowner to download and retain the manufacturing certification statement for the installation year as well as the purchase receipt for each eligible window and door, as it may be requested by the Internal Revenue Service (IRS).
Homeowners should consult their tax advisor to determine whether they qualify for any potential tax credits.
This tax credit helps to provide opportunities for homeowners to make homes and buildings more energy efficient to help reduce energy costs as part of the transition to cleaner energy sources.
This new energy efficienct tax credit took effect on Jan. 1, 2023, and will not expire until Dec. 31, 2032. The tax credit amount is mostly limited to 30% of the project cost. The previous lifetime cap of $500 was changed to an annual cap of either $1,100 to $2,000, depending on the improvements. Homeowners can now claim credit for more projects, especially if they are completed over multiple years.
These Energy Efficiency Home Improvement credits will be applicable on several products to help homeowners maximize their savings, and all now must meet ENERGY STAR Most Efficient criteria. For more information and to stay up to date on available tax credits, visit ENERGY STAR’s page on Federal Tax Credits.
| OLD ENERGY TAX CREDIT | NEW ENERGY TAX CREDIT | |
|---|---|---|
| Timeframe | Expired December 21, 2022 | January 1, 2023, through December 31, 2032 |
| Limits | $500 lifetime limit for all qualified products | No lifetime limits. $1,100 annual limit for all qualified products |
| Eligible Amounts | 10% of product cost Windows: $200 lifetime limit for ENERGY STAR 6.0 products Doors: $500 lifetime limited for ENERGY STAR 6.0 products | 30% of product cost Windows: $600 annual limit for ENERGY STAR Most Efficient products Doors: $500 annual limit ($250 per exterior door) for applicable ENERGY STAR requirements |
For tax years prior to January 1, 2023, energy tax credits were good for up to 10% of cost up to $500 or a specific amount from $50-$300. The product must have been placed in service in an existing home (principal residence). New construction and rentals did not apply.
