FAQ: Tax Credit Details for Homeowners Purchasing Energy-Efficient Replacement Windows

March, 2009 -- Frequently asked questions: Tax credit details for homeowners purchasing energy-efficient replacement windows.

Information Provided by Simonton Windows®

Q: What are the details of the new consumer tax credit for qualified energy-efficient home improvements related to windows? A: Under the new law, when taxpayers purchase replacement windows that meet specific energy efficiency requirements, they are eligible for 30% of the amount returned in as a tax credit. This credit is capped at $1,500 for the years of 2009 and 2010.

Q: What are the restrictions of this tax credit?

A: This law has some very specific restrictions. It's important to note the following:

• 1.Windows purchased must be equal to or below a U Factor of 0.30 and a Solar Heat Gain Coefficient (SHGC) of 0.30. (Note: these are NOT the same factors as Energy Star® qualifications, so homeowners will need to specifically check on the U Factor and SHGC ratings of the windows ordered.)
• 2.The purchase of the qualified windows must be made during the taxable year for which the credit is being claimed.
• 3.The credit is only allowed on the price of the qualified windows themselves, not on installation costs, onsite preparation, assembly or sales tax.
• 4.The tax credit is allowable only for qualified window units placed in service in 2009 and 2010.

Q: What is the timeframe for this program?

A: The credit is provided for all qualified windows purchased and installed in 2009 and 2010.

Q: What exactly is a tax credit?

A: Unlike a tax deduction that only reduces the amount of your taxable income, a tax credit reduces the amount of tax you owe.