Thinking About Installing Energy-Efficient Windows or Exterior Doors? New Tax Credits are Available Under the Inflation Reduction Act

September 19, 2022

The Inflation Reduction Act is a lengthy read, so we’ve done our best to condense this down in a manner that includes only the most pertinent information as it relates to tax credits available to homeowners who want to upgrade to energy-efficient windows or have new exterior doors installed.

Energy Efficient Home Improvement Credit

While the Inflation Reduction Act covers a wide range of energy-efficiency home improvements, we’re going to focus on how it can best benefit those who are planning to use the tax credit towards new windows or exterior doors. According to Evergreen Small Business
and the ENERGY STAR® website, here is what is included:

Installed Energy Efficient Windows

Tax credit of up to $600 per tax payer, per year

Installed New Exterior Doors

Tax credit of $250 per door for up to 2 doors, for a total tax credit of $500 per tax payer per
year.

• The available tax credit is equal to 30% of what is spent on “Qualified Energy Efficiency Improvements”. This does not include the labor cost of installation.
• Replacement windows must meet ENERGY STAR® Most Efficient Certification Requirements
• Exterior doors must meet applicable ENERGY STAR® requirements
• Applies to improvements made January 1, 2023 through December 31, 2032
• Tax credits are non-refundable, making them available to homeowners with a minimum tax liability of $500.

Other Considerations for Homeowners Looking to Take Advantage of Tax Credits Under the Inflation Reduction Act

There are a few restrictions that have been defined to prevent abuse of the new tax credits, thus ensuring that they’re being utilized by homeowners who are actively looking to improve their home’s energy-efficiency. Here are a few of the most important.

• Home improvements and related work must be completed in the US
• The homeowner must be the original and intended user of the improvements
• Homeowners must reasonably expect to use the improvement for a minimum of 5 years
• Improvements must be made to the principal residence, as opposed to rentals
• Can include the cost of both materials and labor when calculating total expenses

The Inflation Reduction Act is a lengthy read, so we’ve done our best to condense this down in a manner that includes only the most pertinent information as it relates to tax credits available to homeowners who want to upgrade to energy-efficient windows or have new exterior doors installed. More information is available online, including the ENERGY STAR® website.

And of course, the Wonder Windows team is here to answer any questions that you may have about installation, applying for tax credits or choosing products that qualify. Get in touch with the location nearest you by calling either of the numbers below, or reach out via email though our secure contact page.