How Energy Tax Credits Can Benefit Homeowners Save on Exterior Remodeling
For decades, Americans have been encouraged to cut back on residential energy use to reduce the strain on natural resources. Savvy homeowners can take benefit of government programs like income tax credits that promote home remodeling using energy-efficient replacement windows and exterior doors. And for 2023, the federal government has significantly enhanced the pot!
As part of the Inflation Reduction Act passed last year, taxpayers with qualifying replacement windows and doors installed on their homes can claim up to $1,200 in tax credits for 2023—up from a $500 cap last year. What’s more, until this year, there was a lifetime cap of $500 in tax credits per household for these energy-efficient upgrades. The new law eliminates the lifetime cap and allows homeowners to claim an annual $1,200 tax credit for particular energy-efficient renovations for up to 10 years. After that, the credit will expire and be subject to renewal or modification after 2032.
What This Means for Window & Door Replacement Customers
To qualify for the energy efficiency tax credits, replacement windows, and exterior doors must meet the “most efficient” criteria established by the ENERGY STAR® program. For qualified upgrades, the annual tax credit will equal 30% of the product cost up to:
- $600 for energy-efficient replacement windows
- $250 per energy-efficient entry or patio door, with a maximum total credit of $500
Precisely What Is Income Tax Credits?
Unlike deductions and exemptions, which can reduce the amount of your taxable income, a tax credit is subtracted dollar for dollar from the taxes you owe. For example, select qualifying energy-efficient replacement windows, patio, or entry doors. You may be able to deduct up to 30% of the cost from your federal income tax bill, subject to the annual cap.
Suppose you’re a Downers Grove resident planning to remodel your home. In that case, you can turn to Valdicass for assistance in choosing energy-efficient replacement windows and exterior doors that meet the eligibility guidelines for the tax credit program. We offer and expertly install many brands that have received ENERGY STAR recognition. Moreover, we take pride in providing no-pressure consultations to help homeowners get the aesthetic and low-maintenance benefits they want, along with superb energy efficiency. Contact us today for more information.