Energy Star Tax Credits Expire at Year End

Are you aware that certain Energy Star tax credits are still in effect? This may come as a surprise to you given the big publicity in 2009 and 2010 for such credits. Legislation for those earlier years covered windows, doors and skylights, but there is another piece of legislations the — Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 — that covers these same items.

Energy Efficiency

On December 17, 2010, President Barack Obama signed into law the aforementioned bill. Under this law, homeowners may claim a tax credit for the purchase of energy-efficient windows, doors, and skylights, just as they did previously. However, under the current law, which has an installation deadline of December 31, 2011, homeowners may receive up to $500 in energy efficiency tax credits.

As with any law, there are some restrictions. They are:

The installed windows, doors or skylights must meet Energy Star requirements. What this means is that depending upon where you live, these units must comply with region specific guidelines that measure the equivalent energy performance for windows and skylights. The criteria for doors is a bit different, but in each situation you’ll need to work with a contractor who sells windows, doors and skylights from an Energy Star partner and meet Department of Energy and National Fenestration Rating Council testing requirements.

To get the tax credit, such windows, doors and skylights must be installed at the homeowner’s primary residence. Excluded are properties you rent out as well as your second home at the shore or up in the mountains.

Installation must be completed by December 31, 2011. This means you must give yourself plenty of time to comparison shop, sign a contract and await installation. Wait too late and a blizzard or some other delay could push your project’s completion into January, costing you a valuable tax credit.

Your Credit

According to Energy Star, “Homeowners may receive a tax credit equal to 10 percent of the product cost (installation may NOT be included) up to $200 for eligible windows and skylights or $500 for eligible doors.” But, take note: if you took credits in earlier years, dating to 2006, then you must include these credits with your lifetime credits.

Sound confusing? You better work with an accountant to see if you qualify. If not, it may still make sense to replace older skylights, doors and windows, but just don’t expect to receive a tax credit.

Resources

Energy Star: ENERGY STAR and the Tax Credit

Energy Star: What makes it ENERGY STAR?

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