Tax Credit Details for Windows & Doors

 

An exterior window or door (other than a storm window or storm door) is considered an “Eligible Building Envelope Component” when it meets or exceeds the prescriptive criteria established by the IECC for the climate zone in which the window or door is installed.

 

A taxpayer may treat an exterior window or door that bears an ENERGY STAR® label and is installed in the region identified on the label as an Eligible Building Envelope Component and may rely on such ENERGY STAR label, rather than on a manufacturer’s certification statement, in claiming the Internal Revenue Code(IRC) Section 25C credit.

 

The credit amount established by IRC 25C is:

  • 10% of the amount paid or incurred by the taxpayer for qualified energy efficiency improvements installed during the taxable year.

 

  • Up to $200 maximum credit for windows for all taxable years (maximum $500 credit for all improvements combined).

 

  • Allowed only for amounts paid or incurred to purchase the window or door.

 

  • Not allowed for amounts paid for onsite preparation, assembly, original installation labor, other components or sales tax.

 

  • The purchase must be made during the taxable year for which the credit is claimed.

 

  • Retroactive and with time limits, covering product in service after December 31, 2005 and before January 1, 2008.

 

The Energy Tax Credit information contained on this site is not complete or comprehensive.  For the entire scope of the information about the Credit for Non-Business Energy Property Section 25C, please visit www.irs.gov.

 

Claiming your Tax Credit:

After establishing your eligibility to claim a tax credit for Non-Business Energy Property, Section 25C, please complete the following to ensure accuracy:

  1. Request an invoice demonstrating the cost breakout of the window or door components from your contractor.  This cost must exclude the cost of onsite preparation, assembly, original installation labor, other components or sales tax.

 

  1. Download the applicable Manufacturer’s Certificate for your IRS records, as well as retain the ENERGY STAR/NFRC label from your qualified window or door.

 

  1. Retain the contractor invoice, ENERGY STAR/NFRC label and the Manufacturer’s Certificate for your IRS records.  You are not required to provide this documentation to the IRC, but you will be require to present it if audited.