Energy efficient windows

[3433]

I have a second (vacation) home in Florida, and for that home earlier this year I ordered replacement energy-efficient windows, through Home Depot.  The payment terms are 24 months same as cash using my Home Depot credit card, with a stipulation that each month I pay the minimum amount due, meaning around $100 per month.

The windows are ready for installation but are sitting in the warehouse of the install subcontractor waiting for my return to Florida in a few weeks.  Initially we’d planned on an install date in early November, but it seems the Inflation Reduction Act would indicate I’d be better off pushing back the installation to January.

My understanding is that as of January 2023 the legislation allows for tax breaks for second (vacation) homes.  So to take advantage of the tax break I need to delay installation until sometime after January 1, 2023.

By that time I’ll have made 2022 payments totaling around $1,000, but I’ll still have a balloon payment waiting, which I plan to make sometime in 2023.  The amount of the balloon payment will vary depending on how long I wait to pay off the balance, but it will be a minimum of $9,000.

It’s my understanding that if I push installation back to January 2023, and pay off the balance of my debt (>$9,000) in 2023, I should be eligible for a $600 tax credit when I file my 2023 return.  Correct?

[VincentL]

Most tax payers are cash basis. This means you incur a deductible expense when it is paid and not based on a promise (credit).

Review the following website:

https://turbotax.intuit.com/tax-tips/going-green/federal-tax-credit-for-solar-energy/L7s9ZiB4D

[TimS50]

You have ordered energy efficient windows form Home Depot and are paying for the purchase with your credit card.  The windows are in and ready to install subject to your giving the go ahead to install the windows.  In this case, the windows would be considered a 2022 purchase even if you delay the installation until 2023.  The first issue is that credit card purchases use the transaction (charge) date as the purchase date.  The second issue is that the windows are in and ready to be installed on a date that you select.  

[3433]

Thanks for the reply, can you please confirm that my acquisition would be viewed as a 2022 purchase regardless of when the windows are installed?  I'd previously received another reply which seems to indicate otherwise:

Most tax payers are cash basis. This means you incur a deductible expense when it is paid and not based on a promise (credit).

 - VincentL (Employee Tax & Finance Expert) 

It's my understanding that this is critical because (I believe) the $600 credit is not available on a second/vacation home until 2023. 

So if in fact my acquisition must be treated as a 2022 transaction,

 - regardless of the installation date, and

 - regardless of when I make the balloon payment, 

I won't qualify for the $600 credit.

Do I understand the situation correctly?