Ensure Tax Savings by Buying Replacement Windows!

y efficiency has gained national importance. Window replacement is recognized as one stellar way to aid in energy independence and the reduction of harmful global emissions. Choosing the right replacement windows is a way to save money and the environment.

Choosing replacement windows with energy-saving benefits is simple and the federal government also made it less expensive for homeowners with the signing of the American Recovery and Reinvestment Act of 2009. The bill includes the opportunity for homeowners to claim a tax credit of 30 percent of the cost of eligible energy-efficient products to a maximum of $1,500 per household for 2009 and 2010 combined when used for remodeling and replacement. According to the IRS, a tax credit is a dollar-for-dollar reduction in your tax liability and can be deducted directly from your taxes owed.

While energy efficient replacement windows are included in this tax credit, not all replacement windows will qualify. Now is the best time to replace your leaky, worn-out windows. However, before you go running off after replacement windows, you want to do your homework to make sure the windows you purchase will qualify for the tax credit.

To qualify for the tax credit, windows must provide high levels of energy efficiency in two categories. They must offer reduced heat loss and reduced heat gain. The measurement for heat loss is called U-Factor and the measurement for heat gain is called Solar Heat Gain Coefficient, or SHGC. To meet the performance requirements, the window or door must have both a U-Factor and SHGC rating equal to or less than 0.30 in all climate zones in the U.S. When you work with your replacement window specialist, ask specifically about the U-Factor and the SHGC: if the windows they’re offering don’t meet these standards, you need different windows!

When comparing windows for energy performance — and the 2009/2010 tax credit — be sure to check the National Fenestration Rating Council (NFRC) label that is displayed on the product. This label displays the U-Factor and SHGC ratings for the window or patio door. If the product does not have this label, then the unit does not have a certified NFRC value. Again, windows that don’t have this label are not going to qualify for the tax credit: this is imperative. It’s important to note that vinyl replacement windows, fiberglass replacement windows, and wood replacement windows are all available in the appropriate rating.

Qualifying replacement windows must be purchased and installed in a primary residence between January 1, 2009 and December 31, 2010. While quality installation is a critical component of any successful window replacement project, installation costs are not included in the 2009/2010 tax credit. Your sales receipt should break out qualifying product costs separately. Bear in mind that many replacement window manufacturer’s warranties are dependent upon having the installation performed by an approved contractor or replacement window installation team. Make sure to read your replacement window warranty and make your replacement window installation choices appropriately.

In addition to your sales receipt, you will also need to save the NFRC label from each window or the Manufacturer’s Certification Statement with your tax documents. Consult with your accountant or tax preparer for further information. In addition, many reputable replacement window specialists can provide you with more insight.

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