If you make a purchase of energy efficient windows or doors from DunRite in 2032, you may be eligible to claim a credit on your taxes that’s worth thousands of dollars—up to 30% of the cost.
There are two different programs that might apply, depending on certain criteria: the Inflation Reduction Act of 2022 and the Residential Clean Energy Credit.
The Inflation Reduction Act
A new act that is still being formed, the Inflation Reduction Act of 2022 will be determined and implemented over a ten-year period. Updates can be found on the IRS website as they are finalized.
Formerly known as the Residential Energy Property Credit, the new Residential Clean Energy Credit falls under the inflation Reduction Act with fresh modifications designed to fight greenhouse emissions and reduce energy use.
According to the Inflation Reduction Act Guidebook provided by whitehouse.gov, it will provide up to $600 for windows, $250 per exterior door up to a total of $500, and a total credit cap of $1,200 per year, which includes other qualified energy efficiency improvements (insulation, heat pumps, air sealing, etc.).
This will be available for purchases installed between 2022-2032. Here’s the biggest improvement, though: there’s a new annual cap of $1,200, which replaces the former taxpayer lifetime limit of only $500 for this credit. It can now be claimed annually, each year improvements are made, assuming they meet other criteria.
You aren’t penalized for partial window replacements, such as replacing half of your windows one year, and the other half the following year, or if you replace the front door one year, and patio doors the next. It also means you might get twice the credit if your installation started in December, but completed in January. After all, it’s based on installation date, not the date you signed the contract or paid the invoices.
Tax credits cannot exceed 30% of the cost of the windows and/or door(s) purchase, excluding installation. You must reasonably expect to use the new windows or doors for at least five years after the installation, and it must be your primary residence.
The Inflation Reduction Act also provides a substantial grant to states for their own energy efficiency programs, too, so be sure to check arizona.gov for new residential homeowner tax credits related to windows and/or doors before filing your taxes. It’s possible there may be additional credits to claim on your state income tax filing.
There’s also a brief IRS FAQ page on this tax credit that’s worth a quick review, if you have questions.
What products qualify?
Since the tax credit is an incentive for homeowners to become more energy efficient, product must meet or exceed the Energy Star 6.0 program requirements to qualify for the tax credit.
Most products installed by DunRite are Energy Star certified, but you can ask us for confirmation, or look up your specific product on the manufacturer’s website to verify.
Installation of a qualifying product can be a replacement window or door, or installation where there wasn’t one before, such as for a newly created wall opening or home addition. Big sliding glass doors and moving wall systems qualify, as long as the product installed can meet the Energy Star requirement.
All qualifying products must be installed on the exterior of the home, so interior doors do not qualify.
How to I claim the credit?
When filing your taxes, use IRS IRS Form 5695 to calculate and claim the credit. You’ll need the size of each window and/or door installed to calculate square footage, and a copy of your purchase receipt from DunRite.
Can I apply this tax credit to a second home?
To qualify for this tax credit, installation must be done at the homeowner’s primary residence. Second homes aren’t eligible; neither are new construction or rental properties. However, these may fit criteria of other programs under the Inflation Reduction Act.
Are there other credits or rebates my purchase may be eligible for?
This is the only tax credit program we’re aware of, along with anything the State of Arizona might offer; however, utility companies often offer rebates, too. You’ll want to check any that apply to your service area. In Arizona, these include APS, SRP and Southwest Gas.
Currently, Southwest Gas, APS and SRP do not offer any rebates for energy efficient windows or doors. We did find one resource that might be useful to bookmark, though, called the Energy Star Rebate Finder. It allows you to search for Energy Star rebates by zip code, including windows/doors and other products.
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(Editor’s note: Originally published Nov. 2020; updated for accuracy and comprehensiveness.)