A Homeowner’s Guide to Federal Tax Credits for Home Improvement


windowsHome improvement tax credits are provided as incentives for homeowners to make home improvements that are energy-efficient. The federal government offers tax credits as a way to offset the cost of the energy-efficient upgrades. These credits come in the form of deductibles when you file your annual income taxes.

According to a recent survey, more than two-thirds of homeowners are planning on remodeling their home, and if you’re one of them, make sure you consider energy-efficient remodels. You can get these federal tax credits on renovation projects like roofs, water heaters, insulation, stoves, heat pumps, heating and ventilation, doors, skylights, and new windows.

New window installation is a great way to save money on energy costs. Energy efficient windows can help prevent heat loss in cold weather and retain cool air when it’s hot out. In addition, the right windows can help you qualify for federal tax credits.

In order to be eligible for these federal tax credits, your replacement windows must:

  • Occupy your primary residence, meaning you live there full-time
  • Never be installed in a new home or a rental home
  • Have an Energy Star-certified product label

According to Consumer Reports, you don’t have to replace all of your windows in order to qualify for the tax credit, either. You can also claim the credit on your tax return if you installed a window where there wasn’t one before. The tax credit is usually around 10% of the cost of the replacement, and you can get up to $200 for your new windows. The credit does not include installation costs, just the price of the actual windows.

Under the Bipartisan Budget Act of 2018, a number of tax credits for residential energy efficiency that had expired at the end of 2016 were renewed. These tax credits are for non-business energy property, and they are now available retroactively to purchases made up to December 31, 2017. Tax credits for all residential renewable energy products have been extended through December 31, 2021.

To save money on your bills and get a tax credit, check out our Energy Star-certified windows at Best Windows. We can help you pick out the best windows for you so you can enjoy all the benefits of energy efficient windows in your home.