5 Inside Tips on Getting Tax Credits in 2009

Pretty soon we’re going to be choosing new windows, doors and appliances for the renovated part of our home. And as luck would have it, a press release about tax credits on new, energy-efficient windows and doors ended up in my in-box recently. Here’s the deal.

There are new tax credits available, thanks to the American Recovery and Reinvestment Tax Act of 2009, which President Obama signed into law in February. This bill extends and modifies the tax credits for windows, doors, and skylights established in the Energy Policy Act of 2005, according to the Energy Star website.

What that means is this: based on the energy-efficiency rating of the windows and doors I choose for the new part of my home, I could get up to $1,500 in tax credits on my 2009 return. Sweet.

But you can’t just put down $1,500 for the credit and call it a day. Here’s what the Energy Star website had to say about the tax credit eligibility:

Qualifying products purchased between February 17, 2009 and December 31, 2010 are eligible for a tax credit equal to 30 percent of the product cost. The maximum amount of homeowner credit for all improvements combined (including roofing, insulation, HVAC, and water heaters) is $1,500 during 2009 and 2010.

So in case you’re in the market for new windows and doors, here are 5 inside tips to help you get the most tax credits you can on your purchases in 2009.

1. In order to receive the tax credit, windows or doors must meet strict criteria. This criteria includes .30 or lower U-factors, which measure the amount of heat escaping through a window or door in an hour; and .30 or lower solar heat gain coefficient, which measures how well a window or door blocks the heat generated from sunlight. (You may see this number in a slightly different format on labels, such as a U of 3.0 or less.)
2. Not all Energy Star rated windows or doors meet the federal tax credit criteria. Here is an explanation of how to read an Energy Star tag, which can tell you whether or not a window or door has the right rating.
3. Several factors make windows, patio doors and entry doors more energy efficient. The composition of the window or door is a major factor, as is the glass, according to Peachtree Doors and Windows.
4. All-aluminum windows are the least energy efficient. On the other hand vinyl and clad wood windows will be the most efficient.
5. Know the differences with vinyl windows. Vinyl windows with multiple hollow chambers within the frame perform better than vinyl windows without the chambers.

One last note on tax credits and rebates: you can use this Energy Star rebate finder to locate local rebates available on appliances, heating and cooling systems, electronics, lighting products and more.

Tags: Energy Star