- Taxpayers who install eligible replacement windows in their primary residence by December 31, 2011, will receive a tax credit equal to 10 percent of the windows' cost. The maximum credit amount is $200, even if 10 percent of your windows' cost exceeds that amount, and the credit applies only to product cost; installation costs do not raise your credit eligibility. In addition, all energy efficiency tax credits max out at $500 for the period between 2006 and 2011 -- if you have already received $500 in energy tax credits for products such as windows, roofing and water heaters during that time period, you cannot claim the tax credit for replacement windows.
- To qualify for the tax credit, replacement windows must meet the energy efficiency requirements of the Energy Star program. In addition to being certified by the National Fenestration Rating Council and meeting Department of Energy requirements, all eligible replacement windows are manufactured by an Energy Star partner (see Resources). Different regions of the United States have different requirements for energy efficiency because of the variations in climate; for example, replacement windows in Southern states need more UV protection than windows in Northern states.
- Save and organize all documents related to the purchase of your eligible replacement windows. The Internal Revenue Service has not decided which documents you must present in order to receive the tax credit, so preserve them all if you wish to claim the tax credit on your next return.
- The amount of the tax credit for energy-efficient replacement windows has decreased greatly since the 2009 and 2010 tax cycles, when homeowners received a credit of 30 percent of product cost. In addition, the maximum tax credit for energy-efficient home improvements was $1,500. Any replacement windows purchased before December 31, 2010, but not claimed for the credit are no longer eligible for these higher credit amounts.
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