2011 Replacement Window Tax Credit
Federal Incentive Expires at End of the Year
would you like to lower your 2011 income tax bill by up to $500
just for installing new, energy-efficient replacement windows and
doors in your home? Well, you can thanks to the Energy Star tax
credit offered by the U.S. federal government. You have until December
31, 2011 to take advantage of this "free money."
How Much Can You Save
So, how do you maximize your savings with the
Energy Star replacement window and door tax credit program? Here’s
what you need to know:
- For replacement windows and skylights, you
can get a tax credit of 10% of the cost, up to $200. To get the
maximum credit, you’d need to spend at least $2000 on new
windows or skylights.
- For replacement doors, you can get a tax credit
of 10% of the cost, up to $500. To get the maximum credit, you’d
need to spend at least $5000 on new doors.
- The credit is based on the price of the windows,
doors or skylights, not including labor or installation.
- The government has a lifetime cap of $500
in tax credits for energy-efficient home improvements.
Important Program Rules
To get the credit, your new replacement windows,
doors or skylights must be installed between January 1, 2011 and
December 31, 2011. You have to install them at your “principal
residence,” which is a home you own and live in most of the
time. It can be a house, houseboat, mobile home, cooperative apartment,
condominium or manufactured home.
It’s important to note that you do not need to replace all
of your windows, skylights or doors to qualify. Also, the new items
don’t necessarily have to be a replacement. For instance,
installing a new window where there was none before qualifies too.
Of course, the replacement windows, doors and skylights need to
be Energy Star qualified, so look for the Energy Star label.
Tax Credit vs. Tax Deduction
Keep in mind, a tax credit like this is much more
valuable than a tax deduction. Here’s an example:
- TAX DEDUCTION: A $400 tax deduction lowers
your taxable income by $400. So, if you’re in the 25% tax
bracket, that deduction only saves you $100.
- TAX CREDIT: A tax credit such as this one
is a dollar-for-dollar reduction of the amount of tax you owe
(or increase in the refund you will receive). So a $400 tax credit
saves you $400.
Get Started with a Free Estimate
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