Are Windows Deductible for Energy Tax?
- The Energy Star program is a joint operation between the U.S. Department of Energy and the U.S. Environmental Protection Agency. The program is designed to rate products on their energy consumption and promote products that meet the standards for energy efficiency. These products carry the Energy Star sticker and qualify for the Energy Star tax credit and deduction program. A product that does not carry the Energy Star sticker does not qualify for the energy tax deduction but may be eligible for other tax deductions through the Internal Revenue Service.
- For calendar year 2011, the Energy Star deduction for energy efficient windows is 10 percent of the cost, with a maximum of $200 per window. The deduction is not available for rental properties or new construction projects. The windows must be installed in the primary residence during the calendar year to qualify. Only windows that carry the Energy Star sticker are eligible for this program. Other windows and improvements and windows installed above the maximum credit may be eligible for an IRS tax credit.
- The IRS offers tax credits and deductions for home improvements. If you purchase energy efficient windows and maxed out the Energy Star credit, the windows may be deductible under IRS codes. If the windows increase the value of the property, the amount of the increase in value may be deductible. If the value of the house does not increase with the new windows, you will not qualify for this tax deduction.
- State governments offer tax deductions for energy efficient windows as well. These deductions vary in percentages, maximums and requirements between the states. The U.S. Department of Energy runs the website www.energy.gov. This website will allow you to select the product for which you are looking and provides a list of all the applicable deductions offered, both state and federal. The website lists windows as one of the options available for tax deductions and credits from state governments.