How to Receive a Tax Credit for New Storm Windows

Replacing storm windows can greatly reduce heating and cooling costs in your home. New energy-efficient storm windows will seal drafty windows. Take advantage of new tax credits to reduce your cost to replace storm windows. The US government is offering this tax credit for homeowners to encourage investment in energy-saving products. Energy-efficient products conserve energy and reduce costs to consumers by using the latest energy conservation materials available.

Things You'll Need

• New storm windows
• Receipt for storm windows
• Manufacturer certification statement

Instructions

1. Make sure you understand the benefits of the new energy-efficient tax credit before buying new storm windows. The American Recovery and Reinvestment Act of 2009 has introduced new energy efficient tax credits for 30 percent of the total cost of new storm windows with a maximum limit of $1500.

2. Find new storm windows that meet the energy-efficient requirements. Not all products with the Energy Star seal are eligible for this tax credit. The Internal Revenue Service will only allow tax credits for specific exterior window products. These products must meet the International Energy Conservation Code for the climate where it is being installed. This standard is considered with both the exterior and storm windows as a combination. Each climate zone may differ in what type of products is eligible in a particular region.

3. Purchase new storm windows for installation. There is a variety of options available. Check with the vendor to make sure the storm windows purchased are eligible for energy efficient tax credits in your region.

4. Maintain records of the storm window purchase. Save all receipts. Look for a manufacturer's certification statement and retain this information for your records as well. This certification should be included with your purchase. The IRS would like to have this kept in your records, but it will not require the certificate to be filed with taxes. This certificate is more to make sure you have purchased products that qualify for the tax credit.

5. File for the tax rebate using IRS tax form 5695. This form will be ready for the 2010 tax year. The energy-efficient tax rebate should be claimed when filing taxes.

Tips & Warnings

• This new energy tax credit replaces the previous tax credits allowable as set in the Energy Policy Act of 2005. The old policy limited the energy efficient tax credit to a maximum of $500. The new tax credit limit was increased to $1500.

• This is a particularly valuable tax savings. Tax credits are a substantially better benefit than a tax deduction. A tax credit of $1500 will lower your taxes by $1500. Expenses eligible for a tax deduction of $1500 will only result in a small portion of the $1500 being returned to the consumer.

• This report is meant to serve as a general guideline. Always consult with a tax professional to receive the most up to date tax information.

Resources

• Energy Tax Information