A Tax Break for Going Green!

The federal government has enacted a tax credit for individuals and corporations that use energy-efficient windows in their existing or new construction homes. Like any tax credit, there are conditions that must be met before the homeowner or builder can get the credit. Also, there is an upward limit on how much can be claimed. As always, when dealing with the taxman, remember rule number one: keep your receipts. You will be asked for them.

The basics of the tax credit are simple, and we'll take it a step at a time since a lot of eyes tend to glaze over when you bring up the taxman.

(1) The tax credit is limited to fifteen hundred dollars. ($1,500.00 US)

(2) It is calculated as thirty percent (30%) of the value you spend on energy efficient doors and windows.

(3) The doors, windows, or skylights must meet certain standards.

If you wish to see the entire chart with more information about the available tax credit, a webpage is available for viewing by clicking here. This webpage is an EnergyStar webpage, and is one of the sources for this article.

Look at rules one and two above. Those make it seem easy. And then you get smacked around by rule number three. The doors and windows have to qualify. This is where I had to get the squirrel hat out and go climbing around in the ethereal canopy of the internet jungle to find just exactly what that all means. The first web page I linked above carried several more links, which went to more links... I think you see this got crazy quickly. So here goes:

This is actually based on when you bought the items you want to put in your home!

(1) Before June 1, 2009: the windows and doors must meet an entire set of guidelines established by the International Energy Conservation Code. But do not panic, the rule is simple: without knowing the guidelines, the buyer can use the EnergyStar labels from the windows themselves, or can obtain a certification document from the manufacturer of the window or door.

(2) After June 1, 2009: the purchased items must meet NFRC guidelines. The guidelines are simple, but you'll need the numbers I'm about to quote when shopping. The products used must have a U-Factor and SHGC of 0.30 or less. Once again, the homebuilder or product manufacturer can provide you with certification that the product meets standards.

The basic upshot on all of this is simple: On June 1, 2009 the labeling requirements for energy efficient building materials changed. So here's the simplest way to help you get what you want:

(1) Remember June 1, 2009. Items manufactured before that date may still be in stock when you go shopping!

(2) If it was manufactured before June 1, 2009 look for EnergyStar labels.

(3) If it was after June 1, 2009 look for NFRC labels.

(4) Take notes on who made the windows you buy. The Manufacturer's website will have a way for you to either request or print directly the certification you need to get the tax credit!

(5) Ask the manufacturer for the certification papers before or at the time of purchase.

For more information in an online brochure, click here.

Now let's put this tax credit into a proper perspective. You would think only lawyers could claim a pay rate of fifteen hundred dollars for a couple of hour's worth of paperwork. Anyone else who did that would be committing a white collar crime - unless they're claiming this tax credit.

Sources:
1. EnergyStar, "Federal Tax Credits for Energy Efficiency," 2009.
URL: http://www.energystar.gov/index.cfm?c=tax_credits.tx_index#c1
2. EnergyStar, "Rebates and Tax Credits for Windows, Doors and Skylights," 2009.
URL: http://www.energystar.gov/index.cfm?c=windows_doors.pr_taxcredits
3. Tax Incentives Assistance Project (TIAP), "Residential Energy Efficiency Incentives," 2009
URL: http://energytaxincentives.org/uploaded_files/residentialflyer.pdf