The Non-Business Energy Property Tax Credit
The Non-Business Energy Property Tax Credit applies to ENERGY STAR related products you may have purchased, including windows, skylights, and doors. Originally introduced in 2005 as part of the Energy Policy Act of 2005, the Non-Business Property Tax Credit (sometimes referred to as the Non-business Energy Property Tax Credit) was intended to encourage Americans to reduce their carbon footprint on the environment.
As long as the ENERGY STAR rated products were added to an existing home that functions as your principal residence, you are eligible for a credit of 10% of the cost with a lifetime limit of $500. The credit only applies to the product(s), such as windows, itself and cannot include the cost of installation. The majority of Vinyl Design windows and doors qualify for the credit.
Even if you did not make any home improvements in 2019, you may qualify for past improvements that were designed to increase your home’s energy efficiency. Although the credit officially expired on December 31, 2019, it has been retroactively extended to December 31, 2017. Thus, you can take advantage of past projects involving ENERGY STAR products. However, you will have to file an amended return for that year.
The Residential Renewable Energy Tax Credit
In addition to the Non-Business Energy Property Tax Credit, you may also be eligible for the Residential Renewable Energy Tax Credit, which was also part of the Energy Policy Act of 2005. This credit applies to any home improvements involving fuel cell, geothermal, solar, and wind technology to boost energy efficiency in your primary or second home. It can be applied to modifications made on your home through December 31, 2021.
In addition, there is no upper limit amount and you can include the cost of installation. The amount of the credit is determined by when the modifications were made to your property, ranging from 30% for property installed after December 31, 2016 and before January 1, 2020 to 22% for property installed and put in service after December 21, 2020 and before January 1, 2022.
How Do You Get Your Credit?
To claim either the Non-Business Energy Property Tax Credit or the Residential Renewable Energy Tax Credit, you will need to complete IRS Form 5695, apply it to your Form 1040, and submit it along with your federal return.
Even if you are not eligible for the tax credits discussed above, you will still want to consider installing ENERGY STAR rated products, including Vinyl Design windows and doors. Not only will you see a decrease in your monthly energy bill, but you may be eligible for future energy tax credits that are still under consideration.