Now is the time to act if you’ve been considering getting replacement windows for your principal residence. As of January, 2021, the Non-Business Energy Property Tax Credit is back. Using IRS Form 5695, you can take a credit of 10% of the cost of your Energy Star windows, up to a cap of $200. This is relative to the windows themselves, not the installation cost.
You do not have to replace all windows in order to qualify for the tax credit. In fact, you can also install a new window where there wasn’t one previously. This is a great opportunity to get more natural light in a room that needs it. The windows must be Energy Star certified, but there is no limitation on size or type other than that.
The tax credit had previously ended, but it has been retroactively extended. If you purchase your windows between 12/31/2017 and 12/31/2021, you qualify for the tax credit as long as you still own the home and it is your principal residence. The tax credit is not applicable for windows purchased for rental properties or new construction.
Even though the credit is not substantial, it adds to the savings you will enjoy by your replacement Energy Star windows themselves. You will be lowering your household’s carbon footprint, protecting your valuables from fading and other UV damage, blocking roughly 75% of heat transfer, and lowering your utility bills. In addition, replacement windows add value to your home because any potential buyer will take comfort in knowing they are purchasing a comfortable home that is energy efficient.
