Energy Efficient Home Improvement Credit

[scsiguru]

We are getting plantation shutters installed in our home and I’m hoping to get them in by end of year. 

We have been getting estimates and one of the companies told us their shutters qualify for this credit. I looked around on the web and found conflicting information. Does anyone know if I can claim this credit and if so what is the maximum amount?

[Bsch4477]

Interior shutters would not qualify but exterior shutters meeting the requirements will. You must get a Manufacturer's Certification Statement for the specific product you purchase. This documentation is required for your tax records and substantiates that the product meets all applicable requirements for the tax credit. 

[Opus 17]

Doubtful it actually qualifies. 

Interior or exterior is not the defining characteristic.  What you are talking about is a "Building envelope component."  This means 

(A) any insulation material or system, including air sealing material or system, which is specifically and primarily designed to reduce the heat loss or gain of a dwelling unit when installed in or on such dwelling unit,

(B) exterior windows (including skylights), and 

(C) exterior doors.

To qualify, the building envelope component must meet "the prescriptive criteria for such component established by the most recent International Energy Conservation Code standard in effect as of the beginning of the calendar year which is 2 years prior to the calendar year in which such component is placed in service."

So for your shutters to qualify, they must  (1) be a "system" specifically and primarily designed to reduce heat gain or loss (and not primarily designed for looks) and (2) they must be listed in the 2023 IEEC codebook and meet or exceed the 2023 IEEC standards.   If so, you can claim a credit of 30% of the cost of materials, not including installation, up to a maximum of $1200. 

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Building envelope components

To qualify, building envelope components must have an expected lifespan of at least 5 years. Qualified components include new:

• Exterior doors that meet applicable Energy Star requirements. Credit is limited to $250 per door and $500 total.
• Exterior windows and skylights that meet Energy Star Most Efficient certification requirements. Credit is limited to $600 total.
• Insulation and air sealing materials or systems that meet International Energy Conservation Code (IECC) standards in effect as of the beginning of the calendar year that is 2 years prior to the calendar year in which such component is placed in service. For example, materials or systems installed in 2025 must meet the IECC standard in effect on Jan. 1, 2023. These items don't have a specific credit limit, other than the maximum credit limit of $1,200. Insulation and air sealing materials or systems are they only types of qualifying property that do not have to meet the qualified manufacturer and PIN requirements.

Labor costs for installing building envelope components don't qualify for the credit. 

[Opus 17]

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@Bsch4477 wrote:

Interior shutters would not qualify but exterior shutters meeting the requirements will. You must get a Manufacturer's Certification Statement for the specific product you purchase. This documentation is required for your tax records and substantiates that the product meets all applicable requirements for the tax credit. 

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Exterior windows are eligible. (I don't know of too many houses that have interior windows.)

Shutters are not windows.  They would only qualify if they are "a system designed primarily and specifically to reduce heat gain or loss".  And if they are such a system (I have doubts) then it doesn't matter if they are interior or exterior.

And if you want to call it a "window" for purposes of the credit, remember that in 2025 you must include the manufacturer's PIN code for the window, it's a new requirement.  

[rjs]

The shutters, if they qualify at all, must be installed and paid for by December 31, 2025 in order to claim the credit.

You have to enter the "Qualified Manufacturer Identification Number" (QMID) of the shutters on your tax return in order to claim the credit. That's what Opus 17 referred to as a PIN. You have to get that number from the manufacturer or the seller. If you don't have the QMID you don't get the credit.

I also want to emphasize something that Opus 17 said above. The credit would apply only to the cost of the shutters themselves, not the cost of labor to install them, so you need a receipt that breaks down the cost.

[Opus 17]

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@rjs wrote:

The shutters, if they qualify at all, must be installed and paid for by December 31, 2025 in order to claim the credit.

You have to enter the "Qualified Manufacturer Identification Number" (QMID) of the shutters on your tax return in order to claim the credit. That's what Opus 17 referred to as a PIN. You have to get that number from the manufacturer or the seller. If you don't have the QMID you don't get the credit.

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Just for reference, the QMID will be required for doors and windows but not "insulation systems".  

[AmeliesUncle]

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@Opus 17 wrote:

They would only qualify if they are "a system designed primarily and specifically to reduce heat gain or loss".  And if they are such a system (I have doubts) then it doesn't matter if they are interior or exterior.  

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The OP said these are "plantain shutters", which are pretty similar to blinds.  Both are often considered to be primarily to reduce heat gain (at least by the manufacturers; owners usually view the primary purpose as privacy).

But your previous comment made an excellent point about the Energy Conservation Code; I have no idea if it deals with shutters/blinds or not.

[Opus 17]

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@AmeliesUncle wrote:

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@Opus 17 wrote:

They would only qualify if they are "a system designed primarily and specifically to reduce heat gain or loss".  And if they are such a system (I have doubts) then it doesn't matter if they are interior or exterior.  

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The OP said these are "plantain shutters", which are pretty similar to blinds.  Both are often considered to be primarily to reduce heat gain (at least by the manufacturers; owners usually view the primary purpose as privacy).

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I know what they are, I have plantation shutters on some of my windows, installed by the previous owner (mostly the ones facing the front or side, they didn't install them on the back where no one could see).   I think they probably do prevent heat gain if closed in the summer (but then the room is dark, do you turn on a light, how does that work out?).  Not sure they prevent heat loss in the winter, since you need them open for light.  But the key question is do they have a rating in the IEEC code for 2023?  

I wouldn't trust anything a window salesman says to me about taxes, nor would I trust my accountant to install windows.  

[AmeliesUncle]

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@Opus 17 wrote:

But the key question is do they have a rating in the IEEC code for 2023

I wouldn't trust anything a window salesman says to me about taxes, 

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I completely agree with both points.

I've had salesman dogmatically TELL me something about the tax benefits, and I automatically will not work with that company (even if they are correct).  I bought solar panels and the salesman told me "As I understand it ... but check with your tax professional to make sure that is correct", and I thought that was a great approach.

[scsiguru]

Thanks everyone for your comments! I’ve decided to not pursue this. Too many variables and nothing definitive. Not worth it to take the chance for for an audit.