Replacement Window Tax Credit: Stimulating Savings & Add Value to Your Home

As part of the American Recovery and Reinvestment Act of 2009 recently signed into law, there are several energy conservation incentives for homeowners, including a better tax credit incentive to install vinyl replacement windows. 

There are lots of good reasons to consider installing replacement windows. Energy-efficient windows can help lower your monthly energy bills, while making your home more comfortable to live in. Installing high-quality vinyl replacement windows can also add to the resale value of the home and result in an immediate reduction of heating and cooling bills. Replacement windows also require little maintenance and can add to your home's curb appeal.

replacement window installationTaxpayers purchasing replacement windows in 2009 and 2010 that meet specific energy efficiency requirements, they are eligible for 30% of the amount as a tax credit. This replacement window tax credit is capped at $1,500 for the years of 2009 and 2010.

To be eligible for the tax credit, replacement windows purchased must be equal to or below a U Factor of 0.30 and a Solar Heat Gain Coefficient (SHGC) of 0.30. U Factor is the amount of heat transferred through a material. The lower the U-value, the slower the rate of heat flow and the better the insulating quality of the window. Solar Heat Gain Coefficient (SHGC) is the percentage of heat gained from both direct sunlight and absorbed heat. The smaller the number, the greater the ability to reduce solar heat gain into the home.

Both U Factor and a Solar Heat Gain Coefficient qualifying stats should be available from the replacement window manufacturer as well as be stated on the window's NFRC (National Fenestration Rating Council) label.

Other requirements for the tax credit include:

  • Purchase of the qualified vinyl replacement windows must be made during the taxable year for which the credit is being claimed.
  • The credit is only allowed on the price of the qualified replacement windows themselves, not on installation costs, on site preparation, assembly or sales tax.
  • The credit is allowable only for qualified vinyl replacement window units placed in service in 2009 and 2010.
  • Homeowners need to save their receipts for their replacement windows purchased, along with all window labels and stickers to apply for the replacement window tax credit.

When selecting a local contractor to install your replacement windows, you should carefully research the company they purchase their windows from. Things to look for include:

  • Manufacturer with a long, solid history of producing top-quality products.
  • Strong warranties on products
  • Companies that offer low maintenance products.
  • Manufacturer high industry reputation, reflected by awards won and strong approval by builders and remodelers who purchase their products every day.

For additional information on tax credits for your installed vinyl replacement windows, visit Simonton Windows or Energy Star.