New 2023 Tax Credits Bring Down the Cost of Replacement Windows

If you’ve been putting off having new windows and doors installed in your San Diego home until this year, you are in luck! Starting on January 1, 2023, new federal tax credits went into effect that allow homeowners to receive a tax credit for the purchase of energy-efficient home upgrades, such as new windows and doors.

The Inflation Reduction Act of 2022, which was signed into law by the president on August 16, 2022, includes various tax credits for home improvements that positively affect a home’s energy efficiency. Among the home improvements outlined in the Act that qualify for the credit are the installation of approved windows and doors.

Homeowners can currently claim up to $600 back on the cost of new windows, and $250 per door (up to $500). This means you can receive up to $1,100 dollars in the form of tax credits!

Please keep in mind that this is a tax credit, as opposed to a tax deduction—and that’s a good thing! A tax deduction only reduces your taxable income, while a tax credit reduces your tax bill.

What Windows and Doors Qualify for the Tax Credit?

Any windows and doors on Energy Star’s approved list qualify for the tax credit. This list is constantly being updated on the EnergyStar.gov site, so be sure to verify that the windows you want to purchase are on it.

How Do I Get the Tax Credit for Replacement Windows and Doors?

To receive your tax credit on replacement windows and doors, you must have your new windows and doors installed during 2023. Then, when you go to file your 2023 tax return (which you will file in 2024) tell your accountant that you purchased a qualifying energy-efficient home upgrade and provide them with your receipt, if needed.

If you file your own taxes through an online service like TurboTax or H&R Block, you should receive a prompt asking you if you made any energy-efficient upgrades to your home. You will then likely have to indicate how much you spent on new windows and doors, and the service should calculate the appropriate tax credit.

Also, be sure you save your receipt from your window and door purchase and file it with your other tax documents, in case you are ever audited by the IRS.

Of course, we aren’t tax experts here at BM Windows, so if you have any detailed questions about the tax credit, be sure to ask your accountant for clarification.

What If I Plan on Doing Other Energy-Efficient Upgrades to My San Diego Home This Year?

There is a $1,200 annual limit on the tax credit for energy-efficient home upgrades, so if you plan to do other upgrades to your home that would fall under the Inflation Reduction Act, you might want to postpone some of them until next year. In other words, do some energy-efficient upgrades this year, and some next year to get the most out of the annual tax credits that are available. There is currently no lifetime cap on the amount of tax credits you can receive for energy-efficient upgrades on your home (but this could change down the road).

Contact BM Windows for Energy-Efficient Windows and Doors

Here at BM Windows, we would love to help you select the best energy-efficient windows and doors for your home! We can come to your home to discuss the various options and provide you with a no-obligation quote on new windows and doors. We can also answer any questions you may have. Contact us to schedule your appointment today!