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Can I receive a tax credit for replacement window installation in my home?

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President Barack Obama recently extended the tax credit for installing energy efficient windows in your home in February of 2009. The tax credit will extend through the year 2010. It is not available for the costs of installation, site preparation, assembly, or individual state sales taxes. The material themselves are the only cost that is covered.

How much are you entitled to save on window replacement through the tax credit?

You may be eligible to save up to 30% of the costs for window replacement on your taxes. In order for you to receive the tax credit for window replacement the windows you purchase must meet the guidelines set forth by the government. Specifically, there are two requirements that the windows must meet in order to receive the credit. In order to check to see if your replacement windows will qualify, check the manufacturer’s labels to see if they meet or exceed the standards that will qualify you for the tax rebate.

The 30/30 criteria

First, the windows must meet or exceed the U-factor. The U-factor refers to the measurement of time it takes for heat to conduct heat flow. It is measured by the formula. Btu/hr- - . The most important thing to learn is that lower the rating for the U-Factor the more efficient the windows are. The lower the score, the better.

Second, the windows must meet or exceed the Solar Heat Gain Coefficient (SHGC) ratings. This rating measures the percentage of the heat in the room that is gained from absorbed heat and direct sunlight. The lower the SHGC rating, the less heat is passed through the surface into your room.

Note: Those who live in cooler climates may want to have windows that have high SHGH rating. This will allow more heat in order to take advantage of free solar heat during the cold months.

Both of these factors are rated on a level of 0 to 1. The lower scores tend to denote that a window is more energy efficient. The government requires a .30 rating of the U-factor and a .30 rating of the SHGC to be eligible for the tax credit.

Customers looking to cash in on this credit will need to submit the IRs form, Form 5695. It looks like this . http://www.irs.gov/pub/irs-dft/f5695--dft.pdf. You will also need to include a receipt for the purchase of the replacement window and the manufacturers’ stickers proving that the windows fall within the tax credit guidelines. The tax credits will allow the taxpayer to receive a tax credit for a certain percentage of the cost of replacement windows. It will not lower the amount of the taxable income of the individual or individuals.

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