4. How do I calculate how much of the $1,500 tax credit I can receive?
In general, the Act allows a tax credit of 30% of “the amount paid or incurred by the taxpayer during such taxable year for qualifying energy efficient improvements”. Windows or doors that meet the efficiency, and certain other rules are included in this category. While the Act does not specifically limit the credit calculation to the cost of the windows or doors, sources have indicated that only the actual cost, excluding installation, is to be used to calculate the credit. Please check with your tax advisor for clarification as B.F. Rich and its employees and representatives do not provide tax advice.
5. Can a homeowner use the entire $1,500 limit toward the cost of having new windows installed in their home?
Yes. Subject to the limitations noted in the response to earlier questions, a homeowner may use the entire $1,500 tax credit on windows. The cost (as determined by tax regulations) must be at least $5,000 to earn the full credit ($5,000 times 30% = $1,500).
6. What happens if the 30% of the qualified project cost is less than $1,500?
A homeowner can “bank” the remaining available tax credit for other qualified projects.
7. Can a homeowner claim $1,500 in tax credits for improvements in 2009 and $1,500 in tax credits again in 2010?
No. Taxpayers are only eligible for a total of $1,500 in tax credits for improvements made in the combined two year period of 2009 and 2010.
8. How will the taxpayer claim the tax credit?
In addition to their Federal Tax filing, taxpayers are not required to file anything more than the tax form 5695, Residential Energy Efficient Property Credit. However, homeowners should keep a copy of the
Manufacturer's Certification Certificate and all NFRC labels from the qualified windows or doors and all related contracts and/or sales receipts.
9. Can a homeowner claim the tax credit for a second home?
No. The tax credit is only available for improvements to the taxpayer’s primary residence.
10. If a homeowner qualified for a tax credit for qualified products in 2006 or 2007 are they eligible for the full $1,500 tax credit?
Yes. The Lifetime Limit was removed in the new stimulus bill.
11. Should a homeowner be promised that they will definitely qualify for the tax credits?
No. Each taxpayer’s situation is different. The taxpayer may have already made other improvements that qualify, or if their personal tax situation may change by the end of the tax year. It is safe to say, “by installing qualified products, a taxpayer may be qualified to claim 30% of the cost (up to $1,500) in tax credits." It is recommended that a taxpayer contact his/her personal tax professional for tax advice.
12. What if a homeowner purchased products prior to June 1, 2009?
January 1 2009 - May 31, 2009. The "Safe Harbor" provision allows the performance terms of the previous window, door, and skylight tax credit to carry over until June 1, 2009. Under the old tax credit, windows, doors, and skylights had to meet or exceed the prescriptive criteria established by the 2001 Supplement of the 2000 International Energy Conservation Code (IECC) or the 2004 Supplement of the 2003 IECC for the climate zone in which the product is installed. Either ENERGY STAR labels or manufacturer certification statements were required to document these requirements for windows and skylights; doors were required to have a manufacturer certification statement. These performance terms and certification requirements will continue until June 1, 2009. The monetary terms of the current tax credit still apply to all window, door, and skylight purchases made in 2009 and 2010.
As of June 1, 2009 all products must meet the U-factor and Solar Heat Gain Coefficient (SHGC) maxima of 0.30. Please note that this is NOT the revised guidance document, which constitutes the final word from the IRS on how the tax credit will be implemented. The IRS plans to issue the revised guidance document later this spring. ENERGY STAR will send out another announcement when this document is available.
