Get up to $500 in Tax Credits for New Windows and Doors and Other Energy Efficient Upgrades

There is some great news for homeowners who either made energy efficient improvements in 2012 or who plan to in 2013. The American Taxpayer Relief Act passed by Congress on January 3, 2013 includes tax credit extensions for energy-efficient appliances, building materials, and more. The best news is that the new act extended the availability of the credit to improvements put in place between January 1, 2012 and December 31, 2013. That means that home efficiency improvements placed in service in either 2012 and 2013 are now eligible.

energy efficiency exterior door tax credit

Homeowners can claim up to $500 in tax credits for efficiency improvements in their primary home under the extension of section 25C of the tax code, the Nonbusiness Energy Property Credit. Qualifying home upgrades include energy efficient windows and exterior doors, water heaters, and air conditioners.

It is important to note that this $500 credit is a cumulative cap for fiscal years 2006 to 2013.

Who gets it? Individuals who install specific energy-efficient home improvements in their primary residences in the United States, which they own.

What energy-efficient home improvements are eligible? The overall $500 cap can be reached in several ways with the purchase and installation of energy-efficient products that meet certain efficiency criteria. See the chart below for qualifying upgrades, eligibility requirements and tax credit amount.

When can I use it? If you installed any qualifying upgrade (including replacement windows or exterior doors) in 2012, then you are eligible for a retro-active tax credit on your 2012 taxes. If you've been thinking aboutreplacing your drafty windows or Click here to get a free quote now!doors for more efficient ones (or making any of the other improvements in the chart below), then Uncle Sam will give you a little help paying for those upgrades on your 2013 taxes in the form a tax credit.

What Qualifies and How Much Do I Get in Tax Credits?

UPGRADE TYPE

ELIGIBILITY CRITERIA

TAX CREDIT

Windows and skylights

Meets ENERGY STAR requirements. SHGC of .30 or better.

10% of material cost, up to $200 (installation/labor costs not eligible).

Exterior doors and Storm Doors

Meets ENERGY STAR requirements.

10% of material cost, up to $500 (installation/labor costs not eligible). The credit includes seals to limit  air infiltration, such as caulk, weather stripping and foam sealants.

Insulation

Meets ENERGY STAR requirements.

10% of material cost, up to $500 (installation/labor costs not eligible).

Metal roof with pigmented coating, or asphalt roof with cooling granules

Meets ENERGY STAR requirements.

10% of material cost, up to $500 (installation/labor costs not eligible).

Central Heating & Air Conditioner (HVAC)

16 SEER or greater

$300

Natural gas, propane, or oil furnace or hot water heater

Energy Factor of 2.0 or greater

$300

Electric heat pump water heater

Energy Factor of .82 or greater

$300

Electric heat pump

Meets the highest efficiency tier set by the Consortium for Energy Efficiency for 2009: SEER of at least 15, an EER of at least 12.5, and an HSPF of at least 8.5.

$300

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Understanding the Federal Energy Tax Credit cap. The tax credit amount is now 10 percent of the cost of building envelope improvements, excluding labor costs and limited to $200 for windows, and specific dollar limits for heating and cooling equipment. There is a cap on the credit amount of $500 for fiscal years 2006 through 2013 combined; if you have ever claimed this credit in the past, it counts against the $500 limit (but does not affect the $1500 limit available for 2009 and 2010). So, for example, if you claimed $300 in 2007, you can only claim $200 in 2011; if you claimed $800 in 2009, you cannot claim any more credit.

Federal Energy Tax credit

What do I need to do to get the tax credit? You will need to file IRS Form 5695 with your taxes. In addition, you will need to keep at least receipts proving that you purchased the improvements and a copy of the manufacturer’s certification. Accountants and tax advisors should also be able to provide more guidance.

 

The information on this website should not be used in any actual transaction without the advice and guidance of a professional Tax Adviser who is familiar with all the relevant facts. Although the information contained here is presented in good faith and believed to be correct, it is General in nature and is not intended as tax advice. Furthermore, the information contained herein may not be applicable to or suitable for the individuals' specific circumstances or needs and may require consideration of other matters.