How to Claim Energy Efficient Windows for Taxes
If you purchase energy efficient windows for your home, you may receive an energy credit on your federal taxes. A credit reduces the income amount subjected to taxes, and decrease your tax liability and may increase your tax refund. The credit allows you to claim 30 percent for energy efficient improvements in the home up to $1500.00 for 2010.
Things you will need.
- Internet access
- Form 5695
- Receipt
- Energy Efficient Labels
- Determine whether you qualify to receive the energy efficient windows credit. Qualified energy efficient windows are new windows that you will use for five years or more.
- Visit the Internal Revenue Service (IRS) website and download the instructions and forms. The form required to file for this credit is form 5695 (Residential Energy Credits). You can find the instructions to fill out the form at the end of the form 5695.
- Review the form carefully. Part 1 of the form has non-business energy tax credit. Line one of this section asked if you use the energy efficient improvement for your primary residence in the U.S. If it is, check yes. Part 2 of the form has line a and line b, which requires that you input the dollar amount spent getting window energy efficient improvements in the home. The form will list specific information as to what is acceptable energy efficient improvement. Review this section carefully to make sure you have the required items necessary to claim the credit.
- Deduct only the price of the energy efficient windows and exclude the installation cost.
- Review the other sections of form 5695. However, this information is only necessary if you are doing your taxes manually. This section is mostly additional questions as well as calculations, which you can input and calculate. However, most computerized tax software will do all the necessary calculation for you.
- Save your receipt for your window purchase plus the energy star label. This is helpful for audit purposes.
- Note that the energy tax credit change for tax year 2011 to 10 percent up to $500 maximum.