Energy Efficient windiws

Forum|Forum|3 years ago
November 16, 2022
1 reply
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I will be installing energy efficient windows in my only residence. What percentage of that cost can be deducted from my tax liability? I should be purchasing about $8000 worth of new windows.

Opus 17

Level 15

See this FAQ.

https://ttlc.intuit.com/community/tax-law-changes/discussion/faq-revisions-to-section-25c-energy-efficient-home-improvement-credit/00/2764314

For windows installed in 2022, the credit is 10% of the cost up to $2000 of cost, for a maximum credit of $200. (There is a $500 lifetime credit under this section, but the cap on windows is $200.)

If you wait until 2023 to install the windows, the credit is 30% of the cost up to $2000 of windows, for a maximum credit of $600 per year. There is no lifetime cap. For the largest tax credit, you would want to try and spread the cost out over 3-4 years so you could claim $600 per year in 2023 through 2026.

You claim the credit in the year the windows are installed, not when they were ordered or paid for. And if you install all $8000 in one year, your maximum credit is $200 or $600, you can't carry the credit forward. The only way to get more is to actually spread out the installations over several years.